Polish Regulations Hurt Shale Development
Poland's strict regulations and requirements for shale developers is starting to hurt its potential for shale gas production, and one major developer has already backed out...

This Article Originally was Published here: http://www.energyandcapital.com/articles/polish-regulations-hurt-shale-development/3048

Both Talisman Energy Inc. (TSX: TLM) and Wisent Oil & Gas Ltd. have voiced reservations regarding the existing bureaucracy in Poland, which they believe hurts developers looking to receive exploration permits for shale gas.

Currently, more than thirty different environmental permits need to be obtained—and more than nine months often pass—before an exploratory permit may be received by a developer. That’s according to Wisent CEO Wes Skrobowski, whose company holds four exploration permits over its native Poland.

Poland does have significant shale reserves—enough for about fifty years to come—which need to be developed and exploited in order to grant the nation some freedom from its present energy dependency on Russia. However, as developers are quickly discovering, it’s a thorny situation.

Wells need to be drilled deeper and harder, costing up to three times as much as in the U.S., transport infrastructure is still quite simplistic, and bureaucracy makes everything difficult. Most recently, Exxon Mobil Corp. (NYSE: XOM) shelved its Poland plans.

From Bloomberg:

“What we desperately need is a kind of deregulation that will simplify the issuing and obtaining of permits to explore shale gas,” Gryzewski said. “But things are moving so slowly here. You may see a couple of big players pulling out soon.”

Worse, a new hydrocarbons law expected to be approved this year will end up raising profit taxes well above the projected 40 percent. All these factors are causing oil and gas developers to seek opportunities elsewhere, such as in the U.K. or even Ukraine.

Currently, some other firms with Polish exploratory permits include Chevron Corp. (NYSE: CVX), ConocoPhillips (NYSE: COP), and the state-owned Polskie Gornictwo Naftowe i Gazownictwo SA.

This Article Originally was Published here: http://www.energyandcapital.com/articles/polish-regulations-hurt-shale-development/3048

Polish Regulations Hurt Shale Development originally appeared in Energy and Capital. Energy and Capital, a free daily newsletter, offers practical investment analysis in the new energy economy.
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