Caspian Report - Issue: 07 - Spring 2014
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Global shale gas<br />
map.<br />
shale gas reserves would satisfy<br />
Poland’s domestic demand for 35<br />
years.<br />
The government’s proposed taxes<br />
exceeding 40%, for instance, have<br />
raised concerns among energy<br />
companies as they face exceptionally<br />
capital investments. Difficult<br />
geology, a non-competitive service<br />
sector, poor infrastructure, lengthy<br />
permissions processes, an uncertain<br />
regulatory and tax environment<br />
as well as lack of rigs have hindered<br />
development. In addition, preliminary<br />
costs per well have increased to<br />
US$15 million – nearly three times<br />
the cost in the U.S. As a result of the<br />
failure to provide an attractive investment<br />
climate, the uncertainties<br />
and bureaucratic constraints as well<br />
as unrealistic expectations for the<br />
short-term future, the pace of shale<br />
gas exploration in Poland has clearly<br />
slowed down in 2013. For the industry,<br />
287 wells still remain open for<br />
exploration, but at the present rate,<br />
the exploration process may not end<br />
before 2037.<br />
The government and Polish industry<br />
representatives still expect that domestic<br />
shale gas production will be<br />
significantly cheaper than Russian<br />
gas. In contrast to public opinion in<br />
Germany and France, the pro-shale<br />
gas policies are supported by more<br />
than 70%. The government has<br />
In contrast to public opinion in Germany<br />
and France, the pro-shale gas policies<br />
are supported by more than 70%.<br />
promised to change its shale gas regulations<br />
to speed up its exploration<br />
and announced last May that it will<br />
not collect taxes on the production of<br />
shale gas until 2020.<br />
71<br />
CASPIAN REPORT, SPRING <strong>2014</strong>
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