Polish Gas Company to Intensify Exploration in 2013

State-controlled gas company PGNiG intends to drill 33 exploratory wells in Poland in 2013, 13 of which will be to explore for unconventional deposits.

The planned spending is to reach zł860 million (€210 million or $270 million US), with expenditures in the unconventional sector estimated at around zł500 million  (€120 million or $155 million US).

PGNiG also informed that the company intends to spend zł2.5 billion (€600 millin, $780 million US) on all upstream projects, both in Poland and abroad.

According to the company, apart from “projects related to the exploration for and appraisal of crude oil and natural gas deposits,” the number describing this years spending includes “construction and extension of underground gas storage facilities, and maintaining of hydrocarbon production capacities.”

Its Management Board proposed not to pay out a dividend and retain all of the 2012 profit to finance this investment program.

This week the company announced that PGNiG has recorded a net profit of over zł2.2 billion in 2012 compared with zł1.75 billion last year.

The gas company profited from a retroactive price reduction of gas imported from Russia, under agreement reached in November with Russian Gazprom, while simultaneously enjoying fixed market price since March till the end of 2012.

As the company estimates, the impact of the agreement with the Russians on the earnings reaches zł3 billion (€720 million or $930 million).

Since the creation of the state-backed shale gas exploration front in Poland, PGNiG has drilled not more than 5 exploratory wells in the country.

PGNiG holds 15 shale gas licenses. The company, not without problems, is finally close to completing its first full, multi-stage test of the horizontal well, in Lubocino on Wejherowo concession in Pomorze.