Calling it quits in Poland
ConocoPhillips (ticker: COP) has joined the ranks of oil majors saying “no more” to shale gas development in Poland. Tim Wallace, ConocoPhillips country manager in Poland, said the company would not continue shale gas development in Poland, reports Reuters.
“We understand the disappointment surrounding this difficult decision,” said Wallace, but “unfortunately, commercial volumes of natural gas were not encountered.”
COP said its subsidiary Lane Energy Poland has invested around $220 million in Poland since 2009 without any commercial success. The company said it also expects to pay approximately $90 million pre-tax in charges associated with pulling out of the country.
The last to leave
ConocoPhillips is following the lead of several other oil majors that have decided to withdraw from Poland after failing to produce commercial amounts gas from the shale formations in the country. Earlier this year, Chevron (ticker: CVX) also gave up the pursuit for shale gas in Poland, following ExxonMobil (ticker: XOM), Total (ticker: TOT) and Marathon Oil (ticker: MRO) out of the country.
According to the Energy Information Administration (EIA), Poland’s energy resources consist mostly of coal, but there was some hope that gas could be extracted from shale formations using hydraulic fracturing. Poland’s technically recoverable shale gas resources were downgraded to 148 trillion cubic feet (Tcf) in 2013 from a 2011 estimate of 187 Tcf.
While exploratory drilling has been done, there is not a single well producing commercial amounts of shale gas in Poland. The only companies that have said they will continue exploring for shale gas in the country are the state-run gas distributor PGNiG and the refiner PKN Orlen.
