Poland's shale gas push remains top priority, claims new treasury minister

By bne IntelliNews June 4, 2013

bne -

Apparently refuting speculation that Warsaw has changed its tune on shale gas, Poland's newly appointed treasury minister insisted on June 3 that the country's push to exploit its reserves of the unconventional fuel remains top priority in its confused energy strategy.

In an interview with Bloomberg, Wlodzimierz Karpinski also said that the government will not lessen the pressure on state-owned companies to lead the drive for shale, and that it will insist it remains a strategic goal. "The pressure on companies to invest in this area will certainly not be smaller, it could even be bigger, because this is a matter of national interest," Karpinski said.

Karpinski said the government was aware that pushing state-owned companies, such as gas monopoly PGNiG or even copper producer KGHM, to invest in exploring for shale gas involved risks. "The risk connected with exploration should be properly distributed," Karpinski said.

With reduced reserves estimates, poor test flows, and uncertain regulatory and tax conditions having seen international investors pulling out over the last year, Warsaw's push for state-controlled companies to lead the shale gas charge has seen them complain that they cannot afford to fulfill all of the government's plans. The stresses on their investment programmes has seen flagship power projects pulled - a trend that contributed to the sacking of Karpinski's predecessor Mikolaj Budzanowski in April.

Grazyna Piotrowska-Oliwa, CEO of national gas utility PGNiG, soon followed. With both departing officials having been keen advocates of the Polish shale gas push, speculation rose that the government may have cooled its interest in the unconventional energy, which at one point it had hoped to see alter the entire European gas market. That is not on the cards anymore, but estimated reserves still suggest Poland could vastly reduce its reliance on Russian gas imports.

The speculation increased last month when Polish media reported comments from investors claiming that they had been told by Deputy Environment Minister Piotr Wozniak that international companies are not wanted. The latest in a long series of delays in preparing a final set of regulatory and tax conditions only helped push those suspicions further.

However, on top of the new treasury minister's claim, Wozniak told Puls Biznesu that the cabinet will receive drafts of the laws on geology and mining and on the taxation of hydrocarbons on June 12. The official claimed that 80% of amendments proposed by investors have been included, and that none have suggested that the new draft could force them to withdraw from the shale gas push.

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