bne -

The IPO of Poland's leading shale gas exploration company has been postponed, an official from its parent, gas firm PGNiG, announced on April 19. The move appears just the latest episode in the deepening mess surrounding the government's energy strategy.

Exalo Drilling, PGNiG's exploration unit, will not float on the Warsaw Stock Exchange debut in the first half of 2013, as was initially planned. That schedule is now unrealistic, Radoslaw Dudzinski, deputy CEO of PGNiG, told reporters, without elaborating on the reasons behind the decision.

"It is hard to say when the offer could take place," he added, stressing that the timing would depend on market conditions. He also said that Exalo Drilling is now focused on restructuring and looking for contracts outside the PGNiG group. He insisted that the work on the public offering is advanced.

However, despite the nod towards the usual IPO opt-out of "market conditions", Polish equities are doing no worse now than they were two months ago when PGNiG confirmed the plan to push the float through in the first six months of the year. "The company has to be ready for an IPO by the end of the first half of the year," CEO Grazyna Piotrowska-Oliwa told reporters on February 5.

Dudzinski told PAP last year that the exploration arm has capital needs of up to PLN1.2bn to fund its hunt for the unconventional energy. The company was reported early this year to be probing the market in a bid to sell licences in Pakistan, Egypt and Libya to raise some of those funds.

It seems more likely that the listing has been delayed by continued uncertainty over Poland's tax regime for oil and gas companies, as well as over the management of PGNiG and the risk that state energy companies are set to face increased political pressure.

The gas company - which has been charged with leading Poland's shale push - has led criticism of the tax plans for producers announced by the government late last year. Despite suggestions from analysts that the regime looks relatively benign for investors, PGNiG complains that it would force the closure of some of its conventional gasfields.

Piotrowska-Oliwa said in December that PGNiG will need to use "every single zloty" it has in its investment drive. That leaves it heavily exposed to policy changes in Warsaw, a risk that saw Standard & Poor's move its rating outlook to negative recently, and Moody's Investors Service to downgrade it a notch. The latter referred to changes in PGNiGs risk profile, "resulting from higher spending on upstream operations an unregulated segment which may be additionally subject to planned taxation of oil and gas in Poland."

At the same time, the risk that companies will be forced into decisions more political than economic has clearly risen amongst state companies in Poland following the April 19 sacking of Treasury Minister Mikolaj Budzanowski for failing to control state companies and keep them in line with the government's drive to boost energy security. As bne suggested on April 22, the pressure will hardly help privatization efforts. Uncertainty over PGNiG in particular has also risen in the wake of the dismissal - the treasury minister was close to Piotrowska-Oliwa and oversaw her appointment.