Sunday, August 31, 2014

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Marathon Departure Another Setback to Polish Shale Gas Industry

Poland (Source: Marathon Oil Corp.)
Poland (Source: Marathon Oil Corp.)

Poland’s nascent shale gas industry, already labouring under the weight of delays in fiscal and regulatory reforms and industry claims of excessive bureaucracy that has hamstrung operational activities, has suffered another set-back with news that Marathon Oil Corp. will end its operations.

The US based company holds 11 licenses for shale gas exploration covering 1.2 million net acres, including a 51% working interest in nine concessions in partnership with Nexen (40%) and Mitsui (9%).

Marathon commented that its departure was the result of “evaluation of exploration activities and unsuccessful attempts to find commercial levels of hydrocarbons,” following the completion of six wells.

Marathon anticipates that its exit from Poland would take place by the second half of 2014.

The moves follow news that Talisman Energy has sold its shale gas interest to co-venturer San Leon Energy. Talisman had signed a farm-in agreement with San Leon in 2010 to earn a 30% working interest in three blocks in the Baltic Basin and had drilled one vertical well in each block.

Deputy Environment Minister Piotr Wozniak attempted to downplayed the recent departures.

“Personally, I’m sorry that renowned companies like Talisman and Marathon are leaving, but from our point of view the question of who will carry on work on their acreage is of secondary importance,” said Wozniak.

San Leon, which now fully holds and operates three licenses in which Talisman had an interest, remained optimistic about Poland’s potential to commercialise its shale gas prospects.

Speaking to Bloomberg, John Buggenhagen, San Leon’s exploration director said, “I don’t think the majors have the mind-set and the patience to explore and prove these types of plays.”

In June 2012, Exxon Mobil announced that it was withdrawing from operations in Poland following the drilling of two wells in the Lublin and Podlasie basins that showed “ no demonstrated sustained commercial hydrocarbon flow rates .“

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