The state of Shale in Europe: Poland

Poland holds « some of Europe’s most favorable infrastructure and public support for shale development, » as described by a May report prepared by Advanced Resources International for the U.S. Energy Information Administration (EIA), titled World Shale Gas and Shale Oil Resource Assessment. The report highlighted the Baltic Basin in northern Poland as « the most prospective region » with a relatively-simple structural setting for shale gas and oil exploration. It noted that the Podlasie and Lublin basins in the east and south of the country also have potential but are structurally complex, with closely-spaced faults that may limit horizontal shale drilling.

In terms of shale resources in Poland, estimates vary significantly. The Polish Geological Institute (PGI) and the U.S. Geological Survey (USGS) collaborated on a preliminary shale gas and shale oil assessment of the country in 2012. The PGI estimated technically-recoverable shale gas resources in the onshore Baltic-Podlasie region to be between 8 and 22 Tcf, while shale oil resources were estimated at between 1.6 and 1.9 billion barrels. But the corresponding USGS estimate was for around 1.35 Tcf of gas and 0.17 billion barrels of oil. Both of these estimates, however, were considerably less than the EIA report’s estimate of 146 Tcf and 1.8 billion barrels for Paleozoic shale gas and oil in Poland.

The EIA believes that the difference has arisen because the PGI excluded the Lublin Basin, while both the PGI and USGS excluded the Fore-Sudetic Monocline – two large shale regions where shale gas drilling and gas production are underway. Another reason could be that the PGI and USGS studies were based on conventional oil and gas logs, core and seismic data that was collected during the 1970s and 1980s, with neither study citing recent data measured from shale industry exploration programs in Poland.

Although Poland has made the most progress in Europe in bringing about a shale industry, the country is still at an early exploratory, pre-commercial phase. The EIA estimates that around 30 vertical exploration shale wells, as well as half-a-dozen vertical and two horizontal production test wells, had been drilled in the country as of May 17. However, early results have not met the industry’s high initial expectations. In 2012, ExxonMobil abandoned the fault-prone Lublin and Podlasie basins after drilling two vertical test wells. Meanwhile, ConocoPhillips and Chevron Corp. are moving cautiously towards drilling their initial test wells in the Baltic and Lublin basins. And, as the EIA report points out, even in the geologically-favorable Baltic Basin, independent energy firms Marathon Oil and Talisman Energy Inc. have recently exited projects after expressing disappointment with reservoir quality. But the EIA believes it is too soon to dismiss Poland’s shale potential. « De-risking shale plays in North America typically requires drilling about 100 wells, while achieving economies of scale requires many hundreds more, » its May report stated.

Successes in the Baltic Basin to date include two vertical wells drilled by Polish Oil & Gas Company (PGNiG) that produced gas from the Cambrian at depths of approximately 9,850 feet. The firm has also drilled its first horizontal well and is targeting commercial production in the Baltic Basin in 2016. ConocoPhillips farmed into, and became operator of, three of Lane Energy’s shale blocks in the western Baltic Basin, where Lane had tested low gas rates from two stimulated horizontal shale wells. One of these produced at an initial 2.2 million cubic feet of gas per day before stabilizing at 500,000 cubic feet per day – making it the highest-production shale well in Poland to date.

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