Introduction
Long lasting parliamentary works on new Polish mining act has been completed. A new mining act was adopted by the parliament on 9 June 2011 and signed by the President of the Republic of Poland on 5 July 2011.
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Market overview
Poland has long established history and regulatory framework of exploration and exploitation of conventional hydrocarbons, including separate authorities directing and supervising such activities.
According to the statistical data announced by the Ministry of Environment the total number of licenses as of June 2011 amounted to 737.
During the recent months Poland has been becoming one of the most interesting countries for companies contemplating exploration and exploitation of shale gas. A number of biggest international companies engaged in oil and gas sector are already present in Poland (such as e.g. Aurelian, Chevron, FX Energy, Nexen, Marathon or ExxonMobile) whereby new players, such as e.g. ENI and Total, are announcing their interest in Polish shale gas market. Most recent data shows that Japanese companies are looking at this market as well.
According to the Ministry of Environment the pool of available exploration license areas may be exhausted soon. It means that the most likely manner of entering into this market would be through mergers and acquisitions.
Currently, the biggest total number of concessions is held by Polish incumbent PGNiG. Other Polish incumbents are also active in this field: Lotos Petrobalic and PKN Orlen.
Among the main international companies active in Polish hydrocarbons sector are such: FX Energy, Aurelian, Marathon, 3Legs Resources, ExxonMobile, and RWE.
The first drilling to explore shale gas was commenced in June 2010 in Łubień region (Pomorskie voivodship, northern part of Poland). According to the concessionaires’ plans there supposed to be 284 drilling wells until 2015, out of which 84 are considered to be certain and 200 are considered to be optional.
Currently, there is no solid data where and in what quantities unconventional (shale or tight) gas may be located. However, according to the Polish State Geological Institute the first reliable data in this respect should be available during 2011.
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Main changes under the new Polish mining act
The most important changes in relation to heretofore regime are as follows:
- full implementation of the hydrocarbon directive 94/92/WE regarding terms and conditions of exploration and exploitation of hydrocarbons; grant of a license shall be preceded with a tender; under the current regime a tender preceded establishment of the mining usufruct;
- implementation of a new ownership model in respect to minerals; a catalogue of minerals owned by the State Treasury names strategic minerals which are significant for economic development, including energy safety; other minerals are owned by land owners;
- elimination of various administrative barriers connected with exploration and exploitation activities (e.g. in relation to licenses and management plans for mining enterprises), improvement of financial management of mining enterprises (e.g. concerning decommissioning fund), etc.
- improvement of health and safety regulations in mining industry (mining qualifications, mining safe and rescue, etc.);
- implementation of more strict rules and regulations in respect to illegal mining activities;
- administration decentralisation through shift of licensing competences in respect to natural mineral water, hot spring water and brines;
- shift of liabilities for damages to the Polish civil code with a choice of remediation actions to be undertaken by a person causing damage reserved to a person suffering damage; a period for submitting claims is extended to 5 years counting from a date on which a suffering person has become aware of damage.
The new mining act will come into force on 1 January 2012 and will repeal heretofore mining regulations from 4 January 1994.
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