Poland: Minister Wozniak on Exxon, Hydrocarbon Bill
The minister responsible for responsible for Poland's oil and gas licensing process has commented that the departure of ExxonMobil from Poland's unconventional gas scene has exposed a loophole in Polish law that allows companies to transfer concession rights without the government consent.
Piotr Wozniak, Poland's deputy minister for environment said the state is not able to stop the American major from selling concession rights in Poland to other foreign companies. ExxonMobil held six exploratory concessions in Poland and decided to terminate its efforts after drilling just two wells.
Since taking office seven months ago, Wozniak and the Ministry of Environment have been advocating for reform of the legal system regulating oil and gas industry.
The “list of defects” in the existing Geology and Mining Law (PGiG) includes the lack of effective legal tools for controlling concessions transfers.
The Ministry of Environment has been pressing for immediate changes to the regulatory system, notably before early exploration activities presently underway move to the development phase and applications are made for shale gas production.
Speaking to TokFM, Minister Wozniak explained that under existing regulations, a license may either be returned, transferred under the surveillance of the ministry, or taken over by a new owner if a licensee company is sold.
Wozniak, touted to be appointed as the government's shale gas coordinator as part of pending legislative amendments, said that the third option was “unfavorable for the state."
“This is an evident loophole in our law system,” underlined the minister. “I’d like to mention that Exxon had registered separate companies for each of those concessions in Poland.” he added.
When asked about the suggested reasons behind ExxonMobil departure, Wozniak commented: “It’s worth to remember that Exxon is the largest of the largest (…) and strategic decisions taken inside such large structures are hard to understand.”
Many observers have linked the move to the industry giant's partnership with the state-controlled Russian oil firm, Rosneft.
“Alliances in the world of oil and gas are very difficult to follow,” Wozniak noted.
At the same time Wozniak acknowledged that in order to properly develop its unconventional resources, Poland desperately needs the expertise and financial capabilities of foreign companies.
“We’re competing to allure money of drilling companies (…) wherever they come from, to make investments in Poland and not in neighboring countries.”
Poland is still to present the legal framework for the development of shale gas resources, after it called off the presentation planned for 13th of June.
Minister Wozniak was also asked about an article in Dziennik Gazeta Prawna which detailed specifics of the pending draft hydrocarbon legislation.
According to the daily’s anonymous source, the state would become a 40% stakeholder in each shale gas concession and would levy a tax reaching 40 percent.
Wozniak denied the paper's account, calling it “mix of amateurism and incomplete information." However, he praised Norwegian, Danish and Dutch models, where state operators hold significant stakes in oil and gas concessions.
Wozniak did not provide a date for the release of the legislation.
Speaking to journalists, Mikolaj Budzanowski, the Minister of Treasury commented: “When these works are over, the draft will be made public.”