Italian energy company Eni is abandoning efforts to produce shale gas in Poland, dealing yet another blow to the country’s ambitions of becoming a significant gas producer and raising questions over shale’s prospects elsewhere in Europe, is reported by the FT on January 15, 2014.
According to company sources, Eni was retreating from its three Polish exploration concessions because the geology was much more unfavourable than had been earlier thought. The decision was later confirmed by Poland’s environment ministry.
Eni is the latest energy company to leave Poland. Early explorers such as ExxonMobil, Marathon Oil and Talisman Energy have also pulled out, leaving Chevron as one of the few big companies still hunting for gas.
The US Energy Information Administration set off Poland’s shale frenzy in 2011 when it estimated possible reserves of 5.3tn cubic metres, the largest in Europe. Recent Polish estimates have been more conservative, in the range of 346bn to 768bn cubic metres. Poland uses 16bn cubic metres of gas a year, two-thirds of which come from Russia.
The initial excitement has dissipated as the government has struggled to come up with a new energy law, annoying an industry that wants clarity before investing. As a result exploration efforts have been lacklustre. So far only about 50 test wells have been drilled, and only a handful of those have been hydraulically fractured.
Geologists estimate that as many as 300 wells have to be drilled and fracked – with each costing $10m-$15m – before there could be a good estimate of Poland’s commercially viable reserves.
