Poland to accelerate works on shale gas regulation
February 6, 2014
PM Donald Tusk and Environment Minister Maciej Grabowski,
The Polish government will drop plans to set up a national energy mineables operator (NOKE), a state-run fund to hold stakes in shale gas licenses and will instead reinforce mining sector regulator, in an effort to speed up works on shale gas extraction, Polish officials said in Warsaw on Wednesday.
The government will present the final shape of the hydrocarbons bill in two weeks PM Donald Tusk and Environment Minister Maciej Grabowski, appointed late last year with the task of accelerating work on shale gas regulation, said at a press conference presenting the ministry's plans for 2014.
The declarations follow after London-listed San Leon Energy said in January it that it had made significant progress toward commercial production after vertical drilling in northern Poland, "the most encouraging vertical shale well test in Poland to date."
The Polish government tries to revitalize investment after a number foreign companies such as Exxon Mobil Corp, Talisman Energy Inc. and Marathon Oil Corporation recently abandoned their shale gas project in Poland.
“In order to encourage investors, we had to choose a less bureaucratic model of the law,” Tusk told reporters. “We need to hurry” as billions of zloty needs to be invested to make the shale gas industry profitable, he said.
Poland’s government, which has failed to approve a shale gas law since at least June 2012, will discuss drilling legislation in two weeks, Tusk said.
"In the end Minister Grabowski recommends a solution which does not assume setting up a new hyper-institution and [instead] reinforces the role of mining [supervision] authority and resorts to existing tools of control over environmental and financial aspects regarding these deposits," Tusk said.
Objectives NOKE was to accomplish "will be realized by other institutions," Grabowski said.
So far works on hydrocarbons bill have been delayed, among others, due to controversies related to NOKE creation. The Environment Ministry and the Treasury Ministry had both claimed they should be the ones to supervise the operator.
The final draft will also streamline the administrative process, introducing a single license instead of two, the Environment Minister said.
"At the moment, in order to reach the extraction stage you need to have two licenses - we will propose a single one," Grabowski said.
Licenses will be granted in a tender procedure and companies will be able to motion with the Environment Ministry for launching such a procedure, a solution called "open door," he added. "We believe it will speed up the process of granting licenses."
Companies are expected to drill at least 30 new wells in search of shale gas this year, having drilled 55 wells so far, Grabowski said, adding that it is also highly likely that the first commercial drilling will take place this year.
The government expects "a year of turning point for shale gas," Grabowski said.
According to a report from the Polish Geological Institute in March 2012, the country has reserves of between 346 billion and 768 billion cubic meters of recoverable shale gas.