Conoco the last global oil firm to quit Polish shale gas

Jun 07, 2015 12:00 AM

ConocoPhillips, the U.S. energy company, said on Friday it has stopped its shale gas exploration in Poland due to unsatisfactory results, leaving the rest of the field to Polish state-run firms. Earlier this year another U.S. energy major Chevron Corp gave up looking for shale gas in Poland, following the withdrawal of Exxon Mobil, Total and Marathon Oil over the past three years.

ConocoPhillips said its subsidiary Lane Energy Poland has invested around $220 million in Poland since 2009. It drilled seven wells over its three Western Baltic concessions. 'We understand the disappointment surrounding this difficult decision,' Tim Wallace, ConocoPhillips country manager in Poland, was quoted as saying in a statement. 'Unfortunately, commercial volumes of natural gas were not encountered.'

ConocoPhillips also said it expected a charge related to the Poland withdrawal of approx. $90 million pre-tax, and around $30 million after-tax.

Global oil firms were attracted to Poland a few years ago, sharing a belief that eastern Europe's biggest economy would repeat the shale gas boom seen in the United States. In 2011 Poland's former Prime Minister Donald Tusk said that he expected the first commercial shale gas in 2014, expressing hopes it will help Poland significantly reduce its reliance on gas imports from Russia.

A drastic cut in Poland's estimated shale gas reserves marked a first blow in 2012 and a slump in oil prices in the past year proved a second. While exploratory drilling has been done, Poland has not delivered a single commercial well. The only companies that declare further drilling are the state-run gas distributor PGNiG and the refiner PKN Orlen.

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