Poland stumbles as shale gas industry fails to take off

Poland stumbles as shale gas industry fails to take off by Dimiter Kenarov, January 27, 2013, The Sacramento Bee
In 2011, the U.S. Energy Information Administration published an enormous figure – 5.3 trillion cubic meters of gas – in estimating the natural gas reserves in Poland, which generated the initial burst of political and investment enthusiasm. Then in 2012, the Polish Geological Institute together with the U.S. Geological Survey, using stricter methodology, decreased those figures by a factor of 10.

“One of the things we do in North America that isn’t done anywhere else in the world is that we drill, drill, drill, drill, drill,” he said. … But it is exactly the sheer scale of drilling required that may prove impossible for Poland. Unlike conventional gas, shale gas development needs a much larger number of wells, a substantial part of which will contribute almost no production. Only a few of them, rich in natural gas liquids or tapping the so-called “sweet spots,” could prove commercially viable, and the decline of production could be rapid, up to 75 percent in the first year, according to the International Energy Agency.

Results have not been encouraging. Exxon Mobil withdrew from Poland in 2012, saying its wells had failed to demonstrate “sustained commercial hydrocarbon flow rates,” while ConocoPhillips relinquished its 70 percent option in three concessions in northern Poland, although it retains three more. It has been reported that Canada-based Talisman Energy also has started talks to sell off its Polish exploration licenses. Meanwhile, with market uncertainty growing, the share price of small independent companies engaged in unconventional gas exploration in Poland has plummeted precipitously, which has forced them to nearly halt operations. [Emphasis added]

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