Even with higher gas prices in Europe, those numbers make the commercial viability questionable.
Industry representatives contend that only economies of scale much more drilling will bring costs down. Yet that wont happen without definite proof of available reserves, while available reserves cant be proved without more drilling a vicious circle.
Definitely hopes and expectations a year ago were much higher than today, says Cezary Filipowicz, a former vice president at PKN Orlen, the biggest oil refiner in Poland, and currently the business development manager of United Oilfield Services, a new service company that has raised $150 million for state-of-the-art equipment, including seismic trucks, a fracturing fleet, and one drilling rig.
Im not sure what will happen next year and how many wells will be drilled, Filipowicz said. If there are again a dozen or so and we use 10 percent of our capacity, it doesnt make sense in the long term. Nobody would risk investment in equipment without a market for services.
Tomasz Chmal, an energy analyst with the Sobieski Institute, a Polish think tank, urges patience. Its too early to judge. Let the business people decide, not politicians, he said. The price of the technology is going down. It may not be economic this year or next year, but it might be economic in the years to come.
That possibility faces another hurdle: The government has made plans to introduce a new hydrocarbon law that would give the state a minority stake in each concession and would, reportedly, raise taxes to around 40 percent of gross profits.
The idea, according to Wozniak, the countrys chief geologist, is to have legislation comparable to that in Norway, Denmark and the Netherlands.
Private operators contend that any comparisons to Norway and Denmark, major producers of conventional gas, are unwarranted, as shale gas resources in Poland are still a matter of speculation, and investment is much riskier.
We havent even proved if theres a commercial hydrocarbon industry beyond what has already been found and the government is already talking about that theyre the North Sea and theyre going to have all this production and theyre going to raise taxes, says Buggenhagen of San Leon Energy. People are just going to leave.