Poland Tries to Save Shale Gas Dream

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Poland is planning to cut the red tape that is strangling its budding shale gas sector, in an effort to attract major oil and gas companies looking to kick-start a European shale gas revolution.

The country's efforts to exploit what is believed to be Europe's largest shale gas reserves has almost collapsed before it has started as numerous key energy companies have pulled out, complaining of legislative delays and costs.

The government has already implemented some legal changes to speed up the transition of exploration projects to permitted commercial drilling. The new legislation is expected to cut the waiting time before exploratory drilling can start to three months, down from up to a year. The new legislation will speed up the granting of environmental and water permits.

Speaking to news agency Interfax, Adam Kozlowski, a counsel at the Warsaw branch of law firm Norton Rose Fulbright, explained: "The Polish government has realized that something is going wrong in terms of attracting investments and exploration work in Poland. While the government has no united view, all authorities agree that the decrease of activities is connected to inefficient administrative procedures."

In April this year, France's Total S.A. (NYSE:TOT) (Paris, France) became the latest oil and gas exploration company to pull out of Poland's emerging shale gas sector. Last year, leading exploration companies ExxonMobil Corporation (NYSE:XOM) (Irving, Texas), Marathon Oil Company (NYSE:MRO) (Houston, Texas) and Talisman Energy USA Incorporated (NYSE:TLM) (Calgary, Alberta, Canada) all exited the Polish shale sector, blaming "red tape." A series of scandals, which saw four government employees and three businessmen being charged with collusion in a bribery scheme to help companies win shale gas exploration licenses, also hurt the country's shale plans. For additional information, see April 23, 2014, article - Total Pulls Out of Polish Shale Scramble.

Draft Hydrocarbons Investment Act:

• Introduce a single license for prospecting, exploration and exploitation, which at present require separate licenses

• Nww licenses will be issued for a defined period, from 10 to 30 years

• Environmental permits will be issued within 45 days of application

• Water permits will be issued within 30 day of application

• Reduce the preparatory stage before the start of exploration drilling from 7-12 months to three months

• The time-frames for issuance of building permits and use permits regarding hydrocarbon prospecting, exploration, exploitation and transportation have been shortened: to 30 days with respect to building permits; and 21 days with respect to use permits

• The term for appealing decisions regarding activities covered in the act will be shortened from 14 to 7 days from its delivery (or to 14 days from its public announcement)

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