Shale Boom in Europe Fades as Polish Wells Come Up Empty

Europe’s best hope for a shale-gas boom is fading as explorers in Poland confront rising taxes, a lack of rigs and rocks that are harder to drill than expected. 

While shale could help Poland lessen dependence on Russian supplies and cut its gas bill, a government proposal for a levy on production threatens to curtail investment. Failed wells by Exxon Mobil Corp. (XOM) curbed the optimism that led two dozen companies to grab licenses. The government said last week that shale-gas reserves may be lower than estimated, and drilling a well costs almost three times as much as in the U.S.

“The growth of shale in Poland will be slower than in the U.S. because it would need to build the infrastructure the U.S. already had available,” said Laura Loppacher, an oil and gas analyst at Jefferies International Ltd. in London. “We know the gas in place is there, but it’s unclear if it can be extracted at a rate that’s commercial.”

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Energy: Europe’s Shale Gas ‘Revolution’: Why Russia Is Shrugging Its Shoulders

Poland last year unveiled designs not only to cast of its irksome energy dependence on Russia, but also to become a European energy exporter by making a drive for shale gas production starting in 2014.

The European power is hoping to repeat the United States’ shale gas revolution after Poland published surveys that estimated it is sitting on colossal untapped gas deposits lodged in shale rock. Such reserves may extend throughout Europe. But Russian gas majors are coolly unperturbed by the grand vision to upset the status quo in Russia’s most lucrative market – and analysts in Moscow are skeptical too.

For more: Europe’s Shale Gas ‘Revolution’: Why Russia Is Shrugging Its Shoulders