Poland May Cut Shale Gas Estimates After Data From Wells

Poland’s estimated shale gas reserves, believed to be the largest in Europe, may be cut once data is analyzed from the country’s first wells, the Polish Geological Institute said.

“Core logs from Polish wells are being analyzed with the help of U.S. technology,” Miroslaw Rutkowski, a spokesman for the institute, said by phone. “As result, we’re expecting that our estimates will be lower than those of the EIA,” he said, in a reference to the Energy Information Administration.

Drilling horizontal wells and using so-called hydraulic fracturing to open fissures in shale rock has made the U.S. the world’s largest gas producer. While Poland was identified as the European country with the best shale-gas potential, initial results from drillers including Exxon Mobil Corp. and 3Legs Resources Plc have disappointed.

The country, seeking to reduce its reliance on Russian gas, may hold 5.2 trillion cubic meters of gas, or enough fuel trapped in shale to meet its needs for 300 years, the U.S. Department of Energy said in April. The estimate was made by applying recovery rates from shale areas producing in the U.S.

The Polish institute and the U.S. Geological Survey are working to analyze drilling results and will publish an estimate of technically recoverable resources of shale gas in Poland on March 21. The revised estimate won’t be definitive as only about a dozen exploration wells have been drilled in Poland so far, Rutkowski said.

‘Geologically Similar’

“The USGS approach is to assess undiscovered, technically recoverable resources using data from the assessed area augmented by data from producing basins that are geologically similar to those we are assessing,” Alex Demas, public affairs specialist at USGS’ Office of Communications, said in an e- mailed response to questions from Bloomberg News.

Producers including Exxon Mobil, Chevron Corp. (CVX), Polskie Gornictwo Naftowe i Gazownictwo SA (PGN), Poland’s dominant gas distributor, and refiner PKN Orlen SA have more than 100 licenses to explore for shale gas in Poland.

On Jan. 31, Exxon Mobil said two exploration wells drilled in Poland’s shale formations weren’t commercially viable because of insufficient flow. In November, 3Legs fell the most in London trading since listing in June after saying flow rates from its second shale-gas well in Poland were low

Treasury Minister Mikolaj Budzanowski in January urged state-controlled energy companies to boost drilling with the aim of starting commercial exploration as soon as 2014 or 2015.

To contact the reporter on this story: Marek Strzelecki in Warsaw at mstrzelecki1@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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