Shale Gas Extraction TaxFree in Poland Through 2020

Shale Gas Extraction Tax-Free in Poland Through 2020

The Polish government decides to make it tax-free to extract shale gas at home through 2020, as the EU member strives to ensure energy independence from Russia.

WARSAW -- The Polish government today decided to make it tax-free to extract shale gas at home through 2020, as the EU member strives to ensure energy independence from Russia.

Poland's shale gas reserves are estimated at between 800 to 2,000 billion cubic meters, and many local and foreign companies have already sunk test wells.

"We adopted measures that should encourage shale gas exploration," Polish Prime Minister Donald Tusk told reporters today.

He added that after 2020, taxes "shouldn't exceed 40% of extraction income."

The nation of 38 million people hopes to exploit its shale gas reserves out of concern for its energy security, as it currently leans heavily on Russia for its natural gas -- a topic of renewed concern given the Ukraine crisis.

Strategic Pipelines

Russia, which has threatened to cut off gas supplies to Kiev, is Europe's biggest single energy supplier, and its natural gas pipelines mainly run through Ukraine.

Poland, which shares a border with Ukraine and is Central Europe's largest economy, currently uses around 15 million cubic meters of natural gas annually. Two-thirds of it is imported, mostly from Russia.

Now the government plans to invest 12.5 billion euros ($17.3 billion) in the shale gas sector by 2020.

Local and global companies have thus far sunk around 50 exploratory wells in Poland. The firm Lane Energy Poland -- controlled by U.S. energy giant ConocoPhillips (IW 500/21) -- was the first to extract shale gas in July 2013. The amount was not big enough however to qualify as commercial production.

U.S. energy giant Chevron (IW 500/2) announced late last year that it had joined forces with Poland's PGNiG on shale gas exploration in the country's south.

Copyright Agence France-Presse, 2014

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish