Poland may consider issuing special bonds to help its state-owned firms finance shale gas development as the EU seeks to gain more independence from costly Russian supplies, the country’s treasury minister said in an interview. 

Mikołaj Budzanowski, who oversees state assets, said the state would mull financial support for shale gas exploration after more intensive drilling reveals crucial details of the size of the country's unconventional gas reserves.

Both coal-reliant Poland and the EU are keen to find ways to diversify imports from Russia, which provides around a half of Poland's gas consumption and some 25% of EU deliveries.

Poland has developed high hopes of shale gas after a study by the US Energy Information Association from 2011 estimated Polish reserves at 5.3 trillion cubic metres, enough to cover domestic demand for around three centuries.

But in its own study published this year Poland estimated its recoverable shale gas reserves at 346-768 billion cubic metres, much less than reported in the US report, yet still enough to encourage investment.

Poland has urged its top oil and gas firms PKN Orlen and PGNiG to invest in shale gas, along with its largest utilities and copper miner KGHM.

To secure funds for drilling the treasury let PKN and PGNiG retain their 2011 profits. It also expects PGNiG to invest in shale the funds it will raise from an IPO of its exploration unit, likely to take place in the second quarter of 2013.

"Additionally, the [state-controlled] Industrial Development Agency [ARP] will also be a co-investor in shale gas exploration," Budzanowski said.

"As for additional instruments, for example such as the issue of special bonds, we will take them into account, but only after we know more details on unconventional gas resources, after a larger number of drilled wells, so that investors have precise information at their disposal."

Foreign firms

Budzanowski also assumes foreign companies will take part in financing shale gas exploration and extraction.

The Polish government has so far granted 112 shale gas exploration licences to global oil majors such as Exxon Mobil, Chevron and other firms including PGNiG and PKN.

All companies involved in the exploration process are eagerly awaiting information on the quality of the country's reserves to assess the viability of their investments.

The lack of reliable information has made it difficult to secure funds for shale gas exploration, which is seen as costly and too risky to attract banks, raising questions over the future of Poland's ambitious shale gas project.

Poland is still to present the legal framework for the development of its potentially lucrative shale gas resources, after it called off the presentation planned for Wednesday.

The law's author - the Environment Ministry - said it would cover issues related to exploration and extraction of oil and gas from both conventional and unconventional sources, including taxation, licencing and environmental issues.

It will also assume the creation of a state operator responsible for supervising oil and gas exploration, as well as a special hydrocarbon fund that will invest part of hydrocarbon tax revenues in education, research and development.

The draft bill will later undergo consultations with other ministries, social partners and the industry.

"The tax on the extraction of hydrocarbons must be rational, so that it does not scare off investors and at the same time guarantees the state's share in profits," Budzanowski said.