Moving to Diversify: Orlen Starts Shale Gas Drilling

Orlen Upstream, part of the Polski Koncern Naftowy Orlen group, has commenced its first exploratory drilling for shale gas in Syczyn, the first step in investing over $150 million to drill six shale gas test wells through 2013.

The Syczyn project is situated on the Wierzbica concession, 50 kms east of Lublin, 30 kms from Polish-Ukrainian border and 30 kms north from first drilling site of ExxonMobil, near Krasnystaw.

Orlen Upstream President and CEO Wieslaw Prugar expects target depth of 3000mts would be reached in 30 to 40 days.

Subsequently, the drilling rig will be moved to another location, Berejow, on the Lubartow concession located 50 kms NW from Syczyn. Orlen plans to drill a total of four shale gas exploratory wells in 2012.

Prugar anticipates receiving evaluation data from both sites at the end of the first half of the next year.  A decision to launch horizontal drilling and stimulation procedures would be made at that time.

Oil refiner and retailer, PKN Orlen is the largest company in Central Europe by revenue. With an eye to regional competitors MOL Group and OMV, Orlen is hoping to enhance shareholder value by launching its upstream business and restructuring itself into a multi-energy company with its own oil and gas extraction and energy production.

Orlen’s upstream branch holds 100% of eight oil and gas exploratory concessions in Poland: six in the Lubelskie  region and two in the Lodzkie region.

Earlier this year the company was reported to have concluded negotiations that will see it becoming a significant shareholder in a number of U.S. shale gas fields owned by an unnamed party. In return, Orlen will offer its new partner access to its Polish shale gas concessions.