PKN ORLEN and ExxonMobil Exploration and Production Poland (“ExxonMobil”) have filed an application with the Ministry of Environment requesting approval for the assignment of two licences, Wodynie-Łuków and Wołomin, to the Polish company. Following the assignment, PKN ORLEN will hold 10 shale gas exploration and appraisal licences in Poland, with a total area of almost 9 thousand square kilometres.
Under an agreement between PKN ORLEN and ExxonMobil, the former agreed to purchase two licences covering a total of 2,150 square kilometres from ExxonMobil. The Wodynie-Łuków licence is located on the border of the Lublin and Warsaw Provinces, and the Wołomin licence – in the Warsaw Province. The rights under the licences will be transferred to ORLEN Upstream, the exploration subsidiary of the ORLEN Group, subject to clearance from the Minister of Environment.
“We expect a relevant decision will be issued by the Department of Geology and Geological Licences in the next few weeks” said Wiesław Prugar, President of the Management Board of ORLEN Upstream. “We have chosen the Wodynie-Łuków and Wołomin licences because of positive results obtained from the vertical exploration well drilled in the village of Goździk, and because the entire region is highly prospective. Analyses of the archived geological data, as well as of the newly collected samples, have encouraged us to broaden the scope of our exploration operations within the Podlasie basin and, consequently, to extend the potential unconventional gas production area in the future.” Mr Prugar added.
In late October 2012, the company completed drilling of the first horizontal well in the Lublin Province, which is now to be fracked. The company is planning to start drilling up to three more exploration wells by the end of this year. In line with its strategy for 2013–2017 announced on November 30th 2012, in the next five years PKN ORLEN may spend up to PLN 5.1bn on upstream projects, chiefly shale gas exploration and production projects. As part of the PLN 2.4bn core CAPEX budget, at least 50 wells will be drilled, with first profits from the upstream projects expected to be seen in 2017.