Marathon, Conoco Phillips Target Poland for Next Shale-Gas Boom

ConocoPhillips and Marathon Oil Corp. are betting that Poland, which gets half of its natural gas from Russia, can yield a development boom in shale formations like those that drove a jump in U.S. output of the heating fuel. The third- and fourth-biggest U.S. oil companies obtained exploration licenses this year covering hundreds of thousands of acres in Poland.

The country, which imports 72 percent of its gas, could become an exporter of the fuel, said Maciej Wozniak, chief adviser on energy security to Prime Minister Donald Tusk. “Everything leads to a conclusion that in four or five years, and this is how much time we have to prepare for this, Poland will become a place with quite a lot of gas,” Wozniak said in a telephone interview.

Shale developments, where rock formations are fractured and injected with water and sand to release trapped fuel, account for about 15 percent of U.S. gas output, according to Oklahoma City-based Chesapeake Energy Corp. After successes in the U.S., producers such as Houston-based Marathon seek to exploit similar geological formations around the world. “We looked at a number of countries in Europe and through Asia,” Marathon Executive Vice President David Roberts told investors in a Nov. 19 presentation after the company obtained its license. “Poland bubbled up to the top of our list.”
ConocoPhillips has an option to develop as many as 1 million acres in the Silurian shale under an exploration agreement with Warsaw-based Lane Energy, the U.S. company said in a Sept. 9 presentation to investors. The companies plan to drill the first well near the northern Polish town of Lebork, said Kamlesh Parmar, country manager at Lane Energy. Parmar said the concession area has all the geological attributes, including a thick and organically rich rock formation, to become a successful shale-gas development.

Source: Bloomberg