Chevron Abandons Poland Shale Gas Exploration

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - Poland has lost one its largest shale gas partners as U.S. energy major, Chevron (NYSE:CVX) (San Ramon, California), announced its decision to stop exploration works.

In a statement the company stated that its Polish arm "has decided to discontinue shale gas operations in Poland as the opportunities here no longer compete favourably with other opportunities in Chevron's global portfolio". Chevron has already closed its shale gas operations in Lithuania and there is speculation that operations in Romania could be next to go.

The company is the latest in a growing line of oil and gas companies to abandon the budding shale gas market in Poland.

In December 2013, Polish Oil & Gas Company (PGNiG) (Warsaw, Poland), the country's largest oil and gas company, signed a Memorandum of Understanding (MoU) with Chevron to collaborate on shale gas exploration projects in south-eastern Poland. For additional information, see December 16, 2013, article - Poland Strikes Shale Gas Deal with Chevron .

Difficult drilling conditions, legislation issues and corruption have dogged the country's efforts to get the market moving. In recent years, Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas), Marathon Oil Company (NYSE:MRO) (Houston, Texas) and Talisman Energy USA Inc. (NYSE:TLM) have all exited the Polish shale sector last year blaming 'red tape', among other things.

In 2011 the U.S. Energy Information Administration (EIA) estimated Polish shale gas reserves at a massive 5.3 trillion cubic metres but this has since been reduced to around 10% of that. However, Poland is still seen as Europe's largest potential shale gas location.

Last summer, the country's environment minister Maciej Grabowski admitted a slowdown in the sector, saying that there were less exploratory wells being drilled than expected. He had predicted over 100 wells to be drilled in 2014 but revised this downwards to 80.

Chevron is also exploring in Romania despite claims last year by Prime Minister, Victor Ponta, that the country has no shale gas. In a statement to Reuters, Chevron denied the claims: "Chevron is analysing the data gathered during its drilling and seismic operations to further understand the resource potential of natural gas from shale. When the analysis has been completed, the results will be provided to the National Agency of Mineral Resources (NAMR) and will remain in the [Romanian] state's custody."

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