* 80 shale wells to have been drilled by late 2014
* Initial forecast was for 100 wells
* First commercial shale gas production still expected this
* But large-scale production still years off
By Anna Koper
WARSAW, July 31 Poland is seeing less
exploratory drilling for shale gas than expected, environment
minister Maciej Grabowski told Reuters, dealing a setback to the
country's efforts to find a cheap alternative to the natural gas
it imports from Russia.
Grabowski said he expected just over 80 exploratory wells
would be drilled this year, down from the 100 he projected in a
newspaper interview in June.
However, he remained confidence that the first commercial
production of Polish shale gas would start this year.
"By the end of June there had been 64 exploratory shale gas
wells drilled in Poland. A further 20 are planned (for this
year)," Grabowski said in an interview.
"Those are only estimates. Some of the wells are mandatory,
but some of them are optional. In the process of concession
extensions, new declarations (of intent to drill wells) might
appear as well", he added.
Poland has embraced shale gas, hoping to replicate a boom in
cheap energy seen in the United States and find an alternative
to the natural gas it imports from Russia, a neighbour with
which is has tense relations.
The drive for shale gas has become more urgent since the
conflict broke out in Ukraine, through which Russia sends almost
half of its gas exports to the European Union.
But initial hopes have been somewhat dimmed due to a
downgrade in estimates of Poland's gas reserves, more difficult
geological conditions than in the United States and less foreign
investment than expected.
The U.S. Energy Information Administration in 2011 estimated
Polish shale gas 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 2012.
Energy firms have yet to find commercial reserves and
several big players, including Exxon Mobil, Marathon
and Total, have either given up exploring or
are not renewing exploration concessions.
Despite this, Grabowski said that based on information the
ministry was receiving from energy companies exploring for shale
gas, commercial production would start this year.
"A well like that would show that there is real possibility
of extracting shale gas in Poland. However, extracting gas on an
industrial scale, and clearly perceptible to the economy, is not
a matter of this year or next," he said.
Poland's parliament has approved some amendments to the
legislation governing shale gas, including broadening the
concessions to cover both exploration and production.
Under the old rules, a firm that found commercial quantities
of gas needed to seek a new concession from the government if it
wanted to extract that gas.
"We don't have plans to introduce any further incentives for
investors, because we're not receiving signals that they need
them. If they appear, we will consider them," Grabowski said.
Chevron and ConocoPhillips are the only
major players left in Poland's shale sector, although in January
independent energy firm San Leon said an initial test
on a permit in northern Poland had shown a potential yield of up
to 400,000 cubic feet per day.
(Editing by Henning Gloystein and Mark Potter)