Oil industry in Poland
The oil industry in Poland began with the first oil well in the world, at Bóbrka Field in 1853, followed by the first refinery in 1854. Poland was the third most productive nation in the world in 1900. But, due to occupations by Nazis and then Soviets, it now has only a small, mostly state-owned component, with production from its Permian Basin in the west, small and very old fields in the Carpathians in the south, and offshore in the Baltic Sea. For natural gas the country is almost completely dependent on legacy pipelines from the former Soviet Union.
Production of significant quantities of natural gas or petroleum from shale or tight (low permeability) reservoirs is in large part dependent on the social acceptance and technical and commercial viability of hydraulic fracturing. As of 2013 only 3% of the Poles opposed fracking. Leasing for shale plays in Poland began in 2007. But, as of 2013, the results of exploration efforts, as well as government regulation, have been disappointing, and estimates of the size of the total resource have been substantially reduced. Data indicates a substantial resource, but the permeability of the rocks, combined with the relative complexity of the faulting in some areas, have made success elusive. In 2013, the Energy Information Administration, a U.S. agency, estimated that 146 trillion cubic feet of shale gas and 1.8 billion barrels (290×106 m3) of tight oil could be economically recovered from the shales in Poland using present technology. However, an estimate published in March 2013 of recoverable shale gas reserves by the Polish Geological Institute was 24.8 trillion cubic feet. It remains to be seen whether the lack of reservoir permeability can be overcome.
Poland has been dependent on a Soviet era gas pipeline system which brings in only expensive Russian gas. Power generation has been based on Poland's extensive reserves of coal, principally lignite. Development of a domestic gas industry to replace Russian imports is highly desirable as would the use of gas to retire or convert coal fired generation plants. Drilling for shale resources began in June 2010. But, as of July 2013, none of the wells which have been completed have produced gas in commercial quantities. ConocoPhillips, which purchased the most prospective geological area from Lane Energy Poland, was able to produce gas and oil in sustainable volumes. But, their costs were too high to justify the project. ExxonMobil, which positioned itself in the Lublin Basin, a highly faulted area, could never get a sustainable test, despite spending huge sums on geological research. Chevron also stubbed its toe in the Lublin Basin area, after receiving some bad geological advice. Talisman Energy also failed, and Marathon Oil drilled where there was little/no prospective shale resource. All have pulled out, leaving the Polish Oil and Gas Company as the prime company in the shale gas and tight oil plays.
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