Poland releases long-awaited shale gas tax draft

WARSAW, March 1 Fri Mar 1, 2013 2:47am EST

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WARSAW, March 1 (Reuters) - Poland plans to levy a 1.5-percent and a 3-percent tax on shale and conventional gas exploration respectively, the Finance Ministry said in a long-awaited detailed draft of the law regulating oil and gas levies.

Poland had counted on an expected abundance of shale gas to boost growth and reduce its reliance on Russian oil and gas.

But investors, already jolted by the government's conservative revision of shale reserves estimates, have grown concerned about its protracted work on a tax and regulation regime announced in October.

The Environment Ministry, which had been expected for months to unfold the tax regime, in February published just a preliminary draft of new concession regulations and environmental issues, but passed the draft on the Finance Ministry.

The Finance Ministry has now repeated that taxes and levies on gas and oil exploration will total about 40 percent of the sector's profits from 2015, positioning Poland as a more attractive investment than Norway, Great Britain and Austrlia.

Poland's Environment Minister Marcin Korolec told Reuters he expected all the new regulations to be adopted in a few months, hoping the new law would prompt investors to intensify their work in Poland.

The taxes will apply to Polish companies such as PGNiG , which owns most of the shale gas exploration licences, refiners PKN Orlen and Lotos, as well as to foreign players, including Chevron Corp and Marathon Oil Corp.

Poland had high hopes for shale after a study by the U.S. Energy Information Association in 2011 estimated its reserves at 5.3 trillion cubic metres, enough to cover domestic demand for some 300 years.

But estimated reserves were slashed to about a tenth of that in a government report published in March last year.

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