Shale gas explorer San Leon Energy extends licenses in northern Poland

WARSAW, Poland – Oil and gas firm San Leon Energy is extending its licenses to explore for shale gas in northern Poland, a company official said Tuesday.

The decision is good news for the shale gas sector in Poland, where, after an initial rush, major exploring companies pulled out citing difficult geological conditions and restrictive regulations.

San Leon Managing Director Pawel Chalupka told The Associated Press that results from its three vertical wells near the Baltic Sea coast encouraged the company to seek an extension to its licenses in the area. It expects to complete its license renewals next year.

San Leon has had the best results so far among the explorers in Poland, but it still needs to see whether they will allow for commercial production.

“You need to do your job and have patience,” Chalupka said on the sidelines of the industry’s Shale Gas World conference.

According to Marcin Zieba, the head of an association of explorers in Poland, the main issue is to find the best way to efficiently release the gas from Poland’s shale rocks, which are different from those in the U.S., where the industry is flourishing.

Poland is still learning about its shale gas reserves and waiting for good news from explorers, said Pawel Poprawa, an expert of the Energy Studies Institute.

Still, Poland remains Europe’s leader in shale gas exploration. A new law simplifying license procedures will take effect Jan.1, while a bill easing exploration taxes should be implemented in mid-2015, officials said.

Some 12 exploratory firms, nine of them foreign, are operating on 59 concession areas and 40 more companies are waiting for their applications for license to be processed.