Poland Oil and Gas Report Q1 2013
Business Monitor International, January 2013, Pages: 117
BMI View:
Strong government support and industry interest in developing a nascent shale gas industry in Poland leaves BMI cautiously optimistic with regard to the country's gas production outlook. We expected modest volumes of shale gas to be commercially produced by 2016. Poland's obligations to reduce its carbon emissions by 2020 under EU policy will also lead to a marked rise in its gas consumption as the country switches from coal to gas for power generation.
The main trends and developments we highlight for Poland's Oil & Gas sector are:
- Undeterred by the Polish Geological Institute (PGI)'s downward revision of its recoverable shale gas estimates - from the Energy Information Administration (EIA)'s previous estimates of 5.3trn cubic metres (tcm) to 0.346-0.768tcm - Poland is sticking to Prime Minister Donald Tusk's late 2014/early 2015 schedule for the commercial production of shale gas. We are cautiously optimistic on Poland's shale gas prospects and expect to see gas production rise from 6.2bn cubic metres (bcm) in 2011 to 7.2bcm in 2016, thanks to modest domestic shale gas production.
Gas output will rise at a quicker pace thereafter to reach 14.2bcm by 2021.
- Shale gas exploration in Poland continues to present a mixed picture. ExxonMobil pulled the plug on the search for shale gas in June 2012, after two test wells in the Lublin and Podlasie Basins failed to flow commercial quantities of gas. UK-based independent 3Legs Resources also bowed out of its Dabie-Laski concession in August 2012. On the other hand, San Leon Energy, Aurelian Oil and Gas, Talisman and local gas giant PGNiG have had encouraging results from their exploration activity. French major Total has also reaffirmed its commitment to Poland's shale plays. The Ministry of Environment expects 41 more wells to be drilled in 2012.
- Poland's treasury has called for refiner Grupa Lotos SA to expand its non-refining portfolio,
particularly in the upstream segment, mirroring a trend in the country whereby the government is pushing state-owned firms into the development of its shale gas resources. A consortium consisting of PGNiG, copper miner KGHM and utilities companies Polska Grupa Energetyczna, Tauron and Polska Energia is considering a shale gas joint venture (JV) while .
Poland's largest refiner PKN Orlen announced in July 2012 that it plans to spend US$87bn on shale gas exploration in 2012 alone.
- BMI expects to see a marked rise in Polish gas consumption by the end of our forecast period,
from 17.0bn cubic metres (bcm) in 2011 to 20.4bcm by 2016. EU policy, which requires a 20
%reduction in carbon emissions by 2020, will force Poland to speed up the rate at which it constructs gas-fired power stations and cuts the amount of coal used in power generation.
Demand could increase to 23.9bcm by 2021. The availability of cheaper domestic gas from a rise in shale gas production could make gas more appealing as a power source and pose an upside risk to our forecasts.
- The Swinoujscie Liquefied Natural Gas (LNG) import terminal is expected to open by 2014,
despite construction delays. This LNG import terminal and a planned interconnector joining Poland and Slovakia - to be operational by 2017 - will ease Poland's reliance on gas supplied by Russia.
- While production growth in conventional oil will be stagnant, we expect a modest rise in oil consumption, driven by domestic economic growth. Despite a visible slowdown in economic activity, we expect growth to bounce back after 2014 and see oil demand increasing to 652.300 barrels per day (b/d) by 2016, implying annual growth of up to 1.5%. With domestic supply forecast to fall from 27,200b/d in 2012 to 26,900b/d in 2016, total liquids import requirement could reach 625,300b/d in 2016, up from 548,300 in 2011.
Liquids shale production could pose an upside risk to our total liquids output forecast. In addition to shale gas resources, PGI estimates that Poland could hold as much as 1,576-1,964mn bbl in shale oil resources,
which would mean domestic oil production could meet the country's needs for 10 years. As with its shale gas, exploration is needed to validate PGI's estimates. However, oil pipeline operator PERN is reported to be already planning pipelines to transport crude from Poland's potential shale reserves. At the time of writing we assume an OPEC basket oil price for 2013 of US99.10/barrel (bbl), falling to US$96.20/bbl in 2014. Global GDP in 2013 is forecast at 3.0%, up from an assumed 2.6% in 2012reflecting some recovery in the US, though uncertainty with regard to the eurozone debt situation and an apparent Chinese slowdown will continue to hamper growth. For 2014, growth is estimated at 3.2%.
BMI Industry View 7
SWOT Analysis 9
Poland Oil and Gas SWOT 9
Industry Forecast Scenario 10
Oil And Gas Reserves 10
Table: Poland Proven Oil and Gas Reserves and Total Petroleum Data, 2010-2016 10
Table: Poland Proven Oil and Gas Reserves and Total Petroleum Data, 2015-2021 11
Oil Supply And Demand 14
Table: Poland Oil Production, Consumption and Net Exports, 2010-2016 14
Table: Poland Oil Production, Consumption and Net Exports, 2015-2021 15
Gas Supply And Demand 18
Table: Poland Gas Production, Consumption and Net Exports, 2010-2016 18
Table: Poland Gas Production, Consumption and Net Exports, 2015-2021 19
LNG 23
Refining And Oil Products Trade 24
Table: Poland Refining - Production and Consumption, 2010-2016 24
Table: Poland Refining - Production and Consumption, 2015-2021 24
Revenues/Import Costs 25
Key Risks To BMI's Forecast Scenario 25
Regional and Country Risk/Reward Ratings 26
Table: Central And Eastern Europe Risk/Reward Ratings 27
Table: Upstream Risk/Reward Rating 28
Table: CEE Downstream Risk/Reward Ratings 31
Poland Overall Rating 35
Poland Upstream Rating - Rewards 35
Poland Upstream Rating - Risks 35
Poland Downstream Rating - Overview 35
Poland Energy Market Overview 36
Overview/State Role 37
Licensing And Regulation 37
Taxation 38
Hydraulic Fracturing 38
Government Policy 39
Licensing Rounds 40
International Energy Relations 40
Oil And Gas Infrastructure 43
Oil Refineries 43
Table: Downstream Projects 43
Service Stations 44
Oil Storage Facilities 44
Oil Terminals/Ports 45
Oil Pipelines 45
LNG Terminals 46
Gas Storage Facilities 47
Table: Gas Storage Facilities In Poland 48
Gas Pipelines 49
Competitive Landscape 51
Executive Summary 51
Table: Key Players - Poland Oil And Gas Sector 53
Table: Key Upstream Players 53
Table: Key Downstream Players 53
Company Profiles 54
PKN Orlen 54
Grupa Lotos 58
Polskie Górnictwo Naftowe i Gazownictwo (PGNiG) 62
Przedsi?biorstwo Eksploatacji Ruroci?gów Naftowych (PERN) 65
BP Poland 67
Shell Poland 69
Aurelian Oil and Gas 71
FX Energy 75
Statoil - Summary 78
MOL - Summary 78
Eni/Minsk Energy Resources - Summary 78
ExxonMobil - Summary 78
Neste Oil - Summary 79
Gaz System - Summary 79
Operator Logistyczny Paliw P?ynnych (OLPP) - Summary 80
Talisman Energy - Summary 80
BNK Petroleum - Summary 81
Petrolinvest - Summary 81
ConocoPhillips - Summary 82
Chevron - Summary 82
Marathon Oil - Summary 83
Realm Energy - Summary 83
3Legs Resources - Summary 83
Regional Energy Market Outlook 85
Global Energy Market Outlook 94
Table: Global Oil Demand Forecasts - A Comparison 96
Central And Eastern Europe - Regional Appendix 100
Table: Oil Consumption - Historical Data & Forecasts, 2009-2016 ('000b/d) 00
Table: Oil Consumption - Long-Term Forecasts, 2014-2021 ('000b/d) 01
Table: Oil Production - Historical Data & Forecasts, 2009-2016 ('000b/d) 01
Table: Oil Production - Long-Term Forecasts, 2014-2021 ('000b/d) 02
Table: Refining Capacity - Historical Data & Forecasts, 2009-2016 ('000b/d) 03
Table: Refining Capacity - Long-Term Forecasts, 2014-2021 ('000b/d) 03
Table: Gas Consumption - Historical Data & Forecasts, 2009-2016 (bcm) 04
Table: Gas Consumption - Long-Term Forecasts, 2014-2021 (bcm) 05
Table: Gas Production - Historical Data & Forecasts, 2009-2016 (bcm) 05
Table: Gas Production - Long-Term Forecasts, 2014-2021 (bcm) 06
Table: LNG Exports - Historical Data & Forecasts, 2009-2016 (bcm) 07
Table: Net LNG Exports - Long-Term Forecasts, 2014-2021 (bcm) 07
Methodology And Risks To Forecasts 108
Glossary Of Terms 109
Table: Glossary Of Terms 09
Oil And Gas Risk/Reward Ratings Methodology 111
Ratings Overview 11
Table: BMI's Oil & Gas Business Environment Ratings - Structure 12
Indicators 12
Table: BMI's Oil & Gas Upstream Ratings - Methodology 12
Table: BMI's Oil & Gas Business Environment Downstream Ratings - Methodology 13
BMI Methodology 115
How We Generate Our Industry Forecasts 15
Energy Industry 15
Cross checks 16
Sources 16
Company Profiles
PKN Orlen
Grupa Lotos
Polskie Górnictwo Naftowe i Gazownictwo (PGNiG)
Przedsi?biorstwo Eksploatacji Ruroci?gów Naftowych (PERN)
BP Poland
Shell Poland
Aurelian Oil and Gas
FX Energy
Statoil - Summary
MOL - Summary
Eni/Minsk Energy Resources - Summary
ExxonMobil - Summary
Neste Oil - Summary
Gaz System - Summary
Operator Logistyczny Paliw P?ynnych (OLPP) - Summary
Talisman Energy - Summary
BNK Petroleum - Summary
Petrolinvest - Summary
ConocoPhillips - Summary
Chevron - Summary
Marathon Oil - Summary
Realm Energy - Summary
3Legs Resources - Summary
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