bne IntelliNews -

The last global energy company in Poland's great shale gas hunt threw in the towel on June 5, as ConocoPhillips announced it will quit the country.

The US oil and gas company was the last remaining international energy major still taking part in Poland's rapidly fading dream of becoming a significant gas producer. It follows the likes of MobilExxon and Total out of the exit. Aside from some smaller foreign investors, ConocoPhillips' withdrawal leaves Warsaw's hopes resting on state-controlled companies PGNiG and PKN Orlen.

The US company estimates it has pumped $220mn (€197.8mn) into Polish exploration. In a joint venture with independent explorer 3Legs Resources, the company has drilled seven wells to date, but like Chevron and other major energy companies that have shipped out, it has failed to see strong enough flows. 

"Unfortunately, commercial volumes of natural gas were not encountered," said Tim Wallace, ConocoPhillips country manager, according to Reuters.

Poland appeared on the verge of an energy revolution around five years ago, as a report from the US Energy Information Administration estimated the country's shale gas reserves at over 5tn cubic meters. That whetted appetites in Warsaw for not only ending dependence on Russia's Gazprom as a supplier of over 60% of Polish consumption, but also to turn itself into a game changer of European gas markets.

The generous estimate attracted dozens of companies to over 100 concessions that the Polish government granted for exploration at the time. However, the tempo of drilling failed to pick up, as bureaucracy further complicated a picture made fuzzy by difficult geology. The enthusiasm waned further on a 2012 report from a Polish geological survey that reduced the estimate of shale gas reserves to roughly 350bn-780bn cubic meters.

It didn't take long for the exodus to begin. ExxonMobil quit in summer 2013. 

Warsaw has been flip flopping since. The initial disappointment of the exits saw it turn to state-controlled companies, with foreign investors complaining of sudden rough treatment. However, with huge investment demands - particularly to build new power capacity - already a strain on Poland's 'national champions,' over the past 12 months or so the government has been trying once more to charm what foreign investors remain. It even managed to finally push through a clear investment and tax regime last year.
 
However, on top of the poor gas flows, falling oil prices have also worked against the business case for shale gas in CEE. Chevron pulled out of both Poland and Romania in February.

As of May, the Polish ministry of environment listed only 46 concessions for shale gas exploration in Poland, including two relinquished by Chevron and the three now given up ConocoPhillips. The onus is now on state-controlled PGNiG and PKN Orlen, with Warsaw pushing the companies it controls to plug the gap. Polish projects plan to drill up to 10 shale gas exploration wells in 2015.

Despite no commercial gas flows to date, and an unimpressive pace of exploration - with just over 70 wells drilled in the last five years - some experts claim shale gas prove successful in Poland.