Poland Backs U.S. Gas Investment, Missile Shield as Obama Visits

Poland welcomes U.S. investment in its shale gas fields and American plans for a missile-defense shield, Foreign Minister Radoslaw Sikorski said as President Barack Obama prepares to make his first visit to the country.

Poland may have as much as 187 trillion cubic feet (5.3 trillion cubic meters) of shale gas reserves, the U.S. Energy Information Administration estimates. That would meet domestic demand for three centuries, enabling the former Soviet satellite to reach its goal of independence from Russian gas imports.

“We support American companies prospecting for shale gas here,” Sikorski said yesterday during an interview in Warsaw. “Shale gas is already a global phenomenon.”

Poland’s resources are attracting attention from Exxon Mobil Corp. (XOM), Chevron Corp. (CVX) and ConocoPhillips, the three biggest U.S. oil companies, which are among those granted 86 licenses to explore for shale gas. As well as shale gas, Obama plans to discuss troop commitments in Afghanistan, defense cooperation and visa issues during meetings with Polish President Bronislaw Komorowski and Prime Minister Donald Tusk on May 27-28.

Obama travels to Poland, a NATO member and the biggest economy among the European Union’s eastern states, after the Group of Eight meeting that begins today in Deauville, France.

Poland in 2008 agreed to host parts of a U.S.-led missile defense shield. While Obama scrapped those plans a year later to ease Russian concerns, the U.S. is pursuing a new system to protect against attacks by so-called rogue states such as Iran.

‘Important Conversations’

Russian President Dmitry Medvedev said May 18 that Russia may quit a nuclear arms treaty with the U.S. if the two sides can’t reach an agreement over missile defense.

“There are important conversations with Russia about synching the western and Russian systems so that it could protect the whole of the northern part of the northern hemisphere, without confrontation,” Sikorski said.

Poland, which joined the North Atlantic Treaty Organization in 1999, has provided troops for the wars in Iraq and Afghanistan. It is the eighth-biggest economy in the EU and was the only member of the bloc to avoid a recession during the global financial crisis.

“This visit shouldn’t just be symbolic, but also driven by hard topics,” said Andrew Michta, director of the German Marshall Fund’s Warsaw office. “The U.S. needs to work as closely as possible with Europe, and Poland is a rising star here.”

Shale Gas

Development of shale fields, where rock formations are horizontally drilled and fractured using water and other liquids under high pressure, may influence Russia’s natural-gas pricing policy, according to a study by King’s College London released this month.

Poland imports two-thirds of its gas from Russia, leaving it vulnerable when Russia’s OAO Gazprom cut off gas shipments through Belarus and Ukraine three times in the past five years.

It will cost as much as 50 million zloty ($17.7 million) for each of the 124 exploratory wells needed to search for Poland’s reserves, Deputy Treasury Minister Mikolaj Budzanowski said earlier this month. That puts the total investment needed at as much as 6.2 billion zloty.

Russia should embrace shale gas both at home and abroad, because it provides a “huge opportunity” for the country to generate wealth for its own citizens, Sikorski said.

“It would be most productive for Russia to get on board this new development,” he said.

U.S. Popularity

Obama’s visit comes as U.S. popularity declines in the first of the former communist states in central Europe to topple its communist rulers. While ties between the two countries, forged with the help of a Polish-American community of 10 million, were based on a shared opposition to communism, the invasion of Iraq and Poland’s exclusion from the U.S. visa waiver program damaged relations at a time when Poles were reaping the benefits of EU membership.

According to a survey for Center for Public Research in Warsaw, 43 percent of Poles are currently well disposed toward the U.S., the lowest since the center began conducting the poll 18 years ago. The figure was as high as 62 percent in 1993.

“Western Europeans used to joke that we were the 51st state of the USA, or at least that’s what we wanted to be,” said Dariusz Szwed, leader of the Polish Greens party. “But now we know that we’re part of Europe.”

The U.S. has an interest in ensuring Poland’s goodwill. According to estimates by the American Chamber of Commerce in Poland and KPMG, the value of U.S. investment in Poland since 1989 may exceed $20 billion.

One of the biggest issues in Polish-U.S. relations is that Poland, unlike the Czech Republic or Hungary, isn’t included in the program that allows citizens of 36 countries to enter the U.S. without first obtaining a visa. About 9.8 percent of Polish visa applications were turned down last year, according to the U.S. Embassy in Warsaw.

“I’m not even going to try and visit the U.S. until the visa rule has been abolished,” said Tomasz Dominiak, a lecturer at Wroclaw University. “I applied once and was turned down, and the whole procedure was a nightmare.”

To contact the reporter on this story: Katya Andrusz in Warsaw at kandrusz@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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