Oil field discovery could prove windfall for PGNiG
By Karol Chlipalski
The biggest oil field ever to be found in Poland was recently discovered in the Międzychód region of the Wielkopolska voivodship. Two pools, Lubiatów and Grotów, are estimated to jointly hold at least 100 million tons of oil - the equivalent of about six years of the country's total consumption. Some experts do not exclude the possibility that the pools are even richer, with as many as 150 million tons.
"After all the research has been done, we will be able to estimate its size more precisely," said Zbigniew Tatys of the exploration department of PGNiG, the company that discovered the Międzychód pools and will probably get the license to exploit them.
The oil field is very large, given the geological conditions of Poland, but it is not comparable to pools in Saudi Arabia or Siberia, experts unanimously said. In their opinion, exploiting the Międzychód pools will allow PGNiG to increase its amount of drilled oil from 500,000 tons to 2 million tons per year, which could bring an additional $300 million (zł. 1.1 billion) in revenue, when calculated at current oil price levels. In 2002 PGNiG's revenues amounted to $2.5 billion (zł. 11 billion).
"It is extremely difficult to say what impact this discovery will have on the country's economy, before we know all the details concerning the pools," said Rodryg Łobodda, an analyst with BRE Bank. "One thing is sure - it will increase the country's energy security. It may also result in decreased petrol prices, but that is not certain."
Łobodda says that the consumption of petrol in Poland is expected to grow by 1 percent per year in the near future.
PGNiG extracts the majority of oil on Polish territory. The second largest firm in this respect is Petrobaltic, which specializes in exploiting underwater pools. Petrobaltic drills about 300,000 tons per year. To date, oil drilled in Poland accounts for about 5 percent of the country's needs.
PGNiG is planning to start exploiting the Lubiatów pool in 2005, with the Grotów pool coming about two years later, once all infrastructure investments have been made. Zbigniew Tatys of PGNiG estimates the cost of infrastructure necessary to start exploitation at $100 million (zł. 375 million).
"It is impossible, from the technical point of view, to drill it out in six years and satisfy the needs of the country completely," said PGNiG's Andrzej Rentak. "Exploitation of the pools is going to take at least 15-20 years."
The oil in Wielkopolska is accompanied by a ground gas deposit estimated at 20 billion cubic meters. PGNiG does not intend to exploit the gas layer because oil-drilling technology makes simultaneous gas exploitation impossible.
"Oil is the priority," said Tatys, adding that the time for gas may come after the oil pool has been drained.
Other oil companies are taking a cautious approach to the news of a newly found oil field in Poland, preferring to wait until all the details are known before taking any sort of action.
"We do not know yet officially whether the layer is big or small, whether the oil is of good quality or bad," said Arkadiusz Ciesielski, from the press office of Poland's largest oil company, PKN Orlen. "We cannot make any decisions based on unconfirmed information. We are interested in co-operating with the exploration department of PGNiG, but first we have to get more information."
"We are interested in buying oil from Międzychód for processing in the southern refineries," said Marcin Zachowicz of the Lotos Group, previously known as Rafineria Gdańska. He declined to comment further until the details concerning the layer are made public.
Lubiatów lies in the middle of Puszcza Notecka (the Notecka primeval forest), which is one of the largest forests in western Poland, but Tatys denied that oil-drilling would have a noticeable impact on the natural environment, saying that it would not spoil the landscape.
"Seventy percent of the installations will be hidden underground," he said, pointing out that all oil rigs will be dismantled after the holes are drilled. In his opinion, the possibility of leakage is almost zero, as the equipment currently used by PGNiG is modern and infallible.
"A catastrophe comparable to the one in Karlin is unthinkable," Tatys said, referring to an incident in 1983 when an oil field was discovered in Karlin. An oil leak resulted in a gusher fire that took months to extinguish. The oil pool turned out to be much smaller than had been initially estimated.
