Headlines

• Treasury Ministry gives Energa green light

to invest in Ostroleka power plant

• PGE issues PLN 130 million in bonds

• GE Hitachi wants to build nuclear components

plant in Poland

• Green Bear planning to build

wind farm in Opole region
No. 3  Vol. 1,  May 2011
• PGE would earn EUR 1 bln from Polkomtel sale

• Kazakhstan privatizing energy firms

• Russia wants to expand its solar energy

PGNiG to apply for five licenses to • Ukrainian Naftogaz to have IPO in 2013
explore shale oil resources in Poland • Polish-American agreement on
Poland’s gas monopoly PGNiG will apply for five licenses to explore potential unconven- cooperation in efficient energy
tional shale oil resources in Poland, deputy head Marek Karabula said. The licenses will • France’s Total to pay $4bln for 12% of
add to the shale gas licenses PGNiG already owns, Karabula added. “We are preparing Novatek and joins Yamal LNG project
five motions to the Environment Ministry to expand our licenses to include exploration
• Vattenfall examines possibility
for shale oil,” Reuters quoted Karabula as telling reporters.
of selling Polish assets
Source: Reuters
• PGNiG starts negotiations with
Gazprom over gas prices
BNK Petroleum’s second well at Lebork
• Gas prices for Ukrainians to rise by 30%
#1 in Poland begins drilling
• Putin extends Gazprom chief’s contract to 2016
BNK Petroleum announced that the second well, Lebork #1 on the Slupsk concession
in Poland, began drilling on March 11, 2011. Drilling is anticipated to finish around • Future for Nabucco natural gas pipeline in doubt
the end of April. The company expects to receive the analysis from the sidewall cores • PGNiG increases supply of gas to PKN Orlen
taken in the Wytowno #1 well in April, following which the designing of the fracture
• Citigroup lowered rating for PGE to “hold”
stimulation program for the Wytowno #1 well will begin. The possibility of achieving
project efficiencies by performing back-to-back fracture stimulations on the Lebork #1 • Kulczyk starts drilling at Olgovskoye Field
and the Wytowno #1 wells is currently being evaluated. The Wytowno #1 and Lebork in Ukraine
#1, wells are being drilled by Saponis Investments Sp z o.o., in which the company has • Hawkley says production from Sorochynska Well
an indirect 26.67% interest and is the manager. #201 in Ukraine’s Dnieper Donets basin
Source: BNK Petroleum “progressing well”

• TFI KGHM wants to finance the construction

Shale deposits: Resources of a gas block in Blachownia

Eurenergy sells concessions • Belarusian anti-nuclear groups urge

government to halt nuclear plans
US firm Resources Eurenergy, which planned to search for gas in the Lublin and Mazovia
regions, has sold its concessions, Puls Biznesu reports. As the daily notes, Mazovia and • Tauron Group revenues up 13% in 2010
Lublin Energy Resources have decided to sell their eight concessions. Among the buyers • Warsaw Stock Exchange confirms
are ExxonMobil and Chevron. In the opinion of an anonymous expert quoted in the start of talks to acquire TGE
paper, Eurenergy Resources gave up the concession because it specialized in searching
• Tauron refutes PGNiG link in
for gas in coal seams that are located near the surface and was less interested in more
Vattenfall acquisitions
costly gas exploration in shale deposits.
• Polish government says it won’t
Source: Puls Biznesu
alter nuclear plans

Citigroup lowered rating for PGE to “hold” • Opole plans wind farm

Citigroup analysts have lowered their recommendation for PGE (Polish Energy Group) • Construction of Belene nuclear plan
to go ahead: Bulgarian PM says
to “hold” from “buy.”
Source: PAP
Marcin J. Moskalewicz, President of OBR PR - “ THIRD TIMES a CHARM”
OBR PR has made an attempt to privitize not once but twice in the
past, only to find itself in the midst of a fiasco in which bids made
made by investors were not consistent with the Ministry of Finance.
A company exists belonging to the Treasury and can be described
as a diamond in the rough even though its annual turnover is in
the range of 100 mln. PLN. OBR PR S.A.( Research & Development
Centre for the Petroleum Industry S.A./Ośrodek Badawczo - Ro-
zwojowy Przemysłu Rafineryjnego S.A.) is the only producer of
aviation fuel (gasoline) in Central and Eastern Europe, selling its
products all over the world. All business planes running on recip-
rocating engines in Poland run on fuel produced by OBR, as well
as a significant amount in Russia, the Balkans, Romania, Austria,
Czech, Slovakia, as well as Saudi Arabia, United Emirates, and the
Philippines. The demand for aviation fuel (gasoline) from OBR will
grow along with the light aircraft market business in Poland, which
is happening at the same speed as Western or Southern Europe,
and the market is about to explode.
Petroleum Club Magazine, in an exclusive interview with OBR’s
new president of the board, Marcin J. Moskalewicz, discussed
the new move towards privitization, why aviation fuel is such a hot
topic, and what are the future plans of OBR PR.
PCM: OBR is prepared for privitization. Is this the first time it
has approached such a notion? Can you give our readers a brief
background on yourself and why you have been appointed as the
new President of the board at OBR PR?
Marcin J. Moskalewicz: To answer the first part of your question,
the company has made an attempt to privitize not once but twice
in the past, only to find itself in the midst of a fiasco in which bids
made made by investors were not consistant with the Ministry of
Finance. This brings us to the second part in which as a result of
the previous failed attempts, I have been hired on by the Treas-
ury Minister as a ‘crisis manager’ because I believe it is possible
– through the Ministry of Treasury – to reach prices that are at
least 10% higher. The Treasury Minister wants to receive as much
as possible for the company, because it believes that the aviation
fuel industry in which OBR PR operates in has a good chance of
exploding. Previously, I was responsible for, among others, the first
draft IPO process for PZU, and my experience includes successful
restructuring and optimization of large companies belonging to the
treasury. I am OBR PR’s first manager with management experience
and my focus will be mainly on improving the company’s financial
indicators. My immediate plans include reducing costs within the
company by 15% and increasing sales by 16%.
PCM: Despite an impressive position on the market, the company
is struggling with problems and urgently needs and optimization
program. What is being currently done to fix this program? What
other problems is the company faced with?
Moskalewicz : At the moment, I am applying a test within the
company known as “private investor”, a process where an analysis
is conducted on the rate of return on planned investments. - We
are investigating whether the company’s capital investment in
the state treasury are made on terms that are also acceptable for
the private investor operating under normal economical market
conditions. A private investor making a capital investment would
have taken into account primarily the expected return on invested
capital and the level of investment risk. We approach the company
as if it were our own. The biggest problem with the company has
3
so far been under-investment, both replacement and innovative. -
The Board has already started an investment program worth more
than 9 million PLN, which represents more than 8 percent of OBR’s
revenues. We are considering, among others, investments in new
columns for the production of aviation fuel. The new management
aims to improve profitability of OBR and reorganize the plant so
that it producing a high yield in a relatively short period of time,
while taking care of the interests of the team, since the company
is a major employer in Plock.
PCM: Please share with our readers a description of the market
you operate in. What are some of the highlights? What is the
company’s vision?
Moskalewicz: OBR PR produces fuels for light aircraft, which in-
cludes private planes, light aircrafts and helicopters. The number of
such aircraft in the world is estimated at 313 thousand units, which
represents approximately 80 percent of all civil aircraft in service.
According to analysts in Western Europe more then 30 thousand
such aircrafts operate in the sky, and in Eastern Europe nearly 3,000.
The light aircraft sector is now one of the fastest growing sectors of
civil aviation in Europe. The European Parliament has committed
its Member States and regional and local authorities to invest in
the modernization and development of small and medium-sized
airports. Thats where the company, based out of Plock, sells its fuel.
Within the vicinity of Rzeszow and Mielec, the aerospace industry
employs over 20,000 people.
PCM: What about your competition?
Moskalewicz : The two biggest players in the fuel market in Poland,
PKN Orlen and Lotos produce aviation fuel, but jet engines, where
sales volumes are described in million of tonnes. OBR has mastered
and successfully developed a niche market for small aircrafts used
for business, which is not worth entering for the large Polish players.
PCM: What is your current production and plans for production?
Moskalewicz : Regarding the company’s production, the most
important assortment is the AVGAS 100LL aviation gasoline,
B91/115, OBR 91UL, and gasoline for ultralight aircraft – OBR85 UL.
In 2010, the company produced and sold aviation fuel in quantities
amounting to 11 997 thousand kg. More then 3600 thousand kg
found itself in the Polish market, which amounts to 100% of the
domestic market share. The remaining amount of gasoline - being
about 8 400 thousand kg - was in export sales.
For 2011, an increase of more than 16% increase in production
and sales of gasoline of aircraft fuel is planned as well as a target
to achieve a sales volume of 14 thousand. kg. It is assumed that
100% of the domestic market and gain new markets for export
sales as well as a gradual increase in market shares already owned.
OBR currently conducts numerous trade negotiations to enhance
market in export sales.
PGNiG looking for partners offering
concessions in return for gas shale
PGNiG told newspaper Gazeta Prawna that it is in talks on
cooperation with the three British corporations: Centrica, BP
and Shell, over an exchange of concessions. The Polish company
wants to acquire a partner for the possession of a concession to
explore for shale gas. Deputy president Radoslaw Dudzinski said
recently that the company had conducted a tender procedure and
had suggested potential areas for cooperation and part-owned
concessions to explore for shale gas. Companies that responded
to the PGNiG proposal offered their own concessions in exchange.
PGNiG may be interested in working with Centrica, which has
invested in shale gas in the U.S. and produces oil and gas in two
areas of the North Sea: the British continental shelf and on the
Norwegian Continental Shelf.
Source: Gazeta Prawna
Treasury Ministry gives
Energa green light to invest
in Ostroleka power plant
The Polish treasury said it will not block large investments by
Gdansk-based Energa. At the December general shareholders’
meeting the treasury blocked an increase in the share capital of
Power Ostroleka, which would have been directed at a $6-billion
1000 MW coal unit. The ministry said it would hold off on such
a decision until the company is privatised. In January Energa
received permission to build in Ostroleka. The company has
already completed all the necessary permits and a contract with
Polskie Sieci Elektroenergetyczne (PSE) operator national network
operator, which already built transmission lines. This year Energa
intends to select the general contractor.
Source: Cire.pl
PGE issues PLN 130 million in bonds
On February 28 the Polish energy group PGE issued short-term
bonds worth PLN 130 million, which will be directed towards
the PGE group of companies. The bonds in the unit were priced
at PLN 99,660.50 with a maturity date of March 28,2011. The
issue is part of PGE’s Bond Issue Programme dated May 11, 2009,
under which as of February 28, 2011 bonds with a nominal value
of PLN 1.430 billion will have been issued.
Source: Cire.pl
GE Hitachi wants to build nuclear
components plant in Poland
“We want to build a supply chain in Poland that will supply compo-
nents, not only for the Polish market but also the markets of other
EU countries,” said Danny Roderick, vice president of GE Hitachi
Nuclear Energy, which belongs to a consortium responsible for
construction projects of nuclear power plants worldwide. The US-
Japanese consortium wants to persuade the Polish government
to ensure Poland is part of wider plans to extend nuclear power
in Europe. “We’re looking at a location on the Baltic coast, where
there is access to ports,” Roderick said. GE Hitachi estimates that
the construction of Polish nuclear units will require about 4-5,000
workers for about eight years, adding that talks are in progress
4
with Polska Grupa Energetyczna (PGE) on the technology that
will be needed in Poland. GE Hitachi offers two types of reactors
: Generation III reactors and generation ABWR type III + ESBWR.
The construction of the first ABWR reactor type should take 40
months. Construction of the other could be shortened. GE is
already building nuclear power stations in Poland, after signing
a cooperation agreement with the Gdansk shipyard and Rafako.
It also collaborates with Polish scientists from the Technical Uni-
versity of Gdansk, the West University of Technology, University
of Szczecin and the Koszalin University of Technology.
Source: Cire.pl
Green Bear planning to build
wind farm in Opole region
SPV’s Green Bear Corporation Poland said it intends to build a
wind farm with a capacity of 87 MW in the Opole region of Lu-
brza. The wind farm will have 29 wind turbines with a capacity
of 3 MW each. Lubrza 304 GB The local unit of Lubrza with the
concession to actually undertake the work is already working on
the expansion of the project and is in the process of preparing
a report assessing the investment’s impact on the environment.
Green Bear Corporation Poland plans to build wind farms with
a total capacity of about 500 MW. It is the owner of a 10.8-MW
wind farm in Pomerania Lisewo.
Source: Cire.pl
Kazakhstan privatizing energy firms
The Kazakh government has announced the sale of shares in public
companies, including the national provider of energy and a gas
trading company. The first stake in Kazakhstan Electricity Grid
Operating will be up for sale first and later the government plans
to sell 5% of state gas company KazMunai National
Source: Puls Biznesu
Russia wants to expand
its solar energy
“The Russian government has allocated funds for investments and
subsidies for solar projects,” according to the DGP, citing Krzysztof
Grzybowski, an analyst at Frost & Sullivan, who said that invest-
ment in solar technologies will allow Russia to gain access to the
know-how necessary to understand the various elements of the
value chain of the sector. The state-created corporation Rusnė,
which has a research center in Stavropol Krai, wants to build the
project Khevel using concentrated solar power energy to generate
electricity with a capacity of 12.3 MW.
Source: Gazeta Prawna
Ukrainian Naftogaz to
have IPO in 2013
Ukrainian state energy firm Naftogaz, the owner of a pipeline
network connecting Russia’s Gazprom to its European markets,
plans to float its shares on the market around 2013, it has an-
nounced. Naftogaz carries Russian gas to Europe and buys natural
gas from Gazprom to resell in Ukraine. It is due to receive $2.75
billion in transit fees from Gazprom this year. Naftogaz Chief
Executive Yevhen Bakulin told an energy conference: “We are
planning … an IPO so that shares can be freely bought and sold
on the market…. This work should take between a year and a
half and two years.” Bakulin also said Naftogaz spent $1.5 bil-
lion on imports of Russian gas last month, which reached 6.3
billion cubic metres.
Source: Reuters

Polish-American agreement on
cooperation in efficient energy
Polish foreign minister Radoslaw Sikorski met US Deputy Energy
Secretary Daniel Ponemanem, followed by Polish Ambassador
Robert Kupiecki to the USA to sign a memorandum of under-
standing on Polish-American cooperation in the field of clean
and efficient energy. The agreement will facilitate cooperation
between the two countries in the field of new technologies and
their implementation, with a focus on shale gas exploration and
nuclear energy. “This document is a legally binding declaration of
intent only, but the United States has clean energy technology,
the extraction of shale gas and nuclear power, and these are the
things that interest us. We hope this will intensify cooperation
in the field,” Sikorski said.
Source: PAP

France’s Total to pay $4bln for 12% of

Novatek and joins Yamal LNG project
Total, Europe’s third-biggest oil company, has agreed to buy
12% of OAO Novatek and join the Yamal LNG project to ac-
cess reserves in Russia’s Arctic areas. “It is a good deal that
has great potential,” Prime Minister Vladimir Putin said at his
residence near Moscow after the heads of Total and Novatek
signed accords. Total is paying about $4 billion for the Novatek
stake, said Chief Executive Officer Christophe de Margerie.
The French company plans to raise its holding to 19.4% within
three years, according to a statement. Total will gain access to
equity production of 120,000 barrels of oil equivalent a day
and about 1 billion barrels of proved and probable reserves,
and appoint a director to Novatek’s board, the company said
in a statement. Total is also working with OAO Gazprom,
Russia’s gas export monopoly, to develop the Shtokman field.
De Margerie in June urged Putin to keep the Arctic project
on track. Delays have put its first gas back to 2016 and LNG
to 2017. Shtokman may start in 2018, said Pyotr Sadovnik,
deputy head of the subsoil resources agency.

Vattenfall examines possibility

of selling Polish assets
Vattenfall is continuing to examine the possibility of selling its
assets in Poland, according to Rzeczpospolita, which notes that
the Swedish group holds distribution networks in Upper Silesia,
plants in Warsaw and more than an 18%- stake in Enea. The as-
sets are valued around PLN 6 billion. Rzeczpospolita notes that
Tauron is interested in buying Vattenfall Distribution Poland - the
operator of a distribution network in Upper Silesia.
Source: Rzeczpospolita

5
Enea share price falls after
Treasury pulls plug on EdF
After Friday’s decision by the Treasury Ministry to suspend ex-
clusivity in the sale of 51% of power generator Enea to France’s
EdF Enea’s share price on the Warsaw bourse fell 6% to PLN 19.78
per unit. Kliszcz Kamil, an analyst at BRE, told Parkiet that the
fall was probably due to the sale of shares by investors who had
hoped the previous Friday to call in shares from SMEs. BZ WBK
analyst Pawel Puchalski expects another attempt to sell shares
in Enea in the autumn or winter.
Source: Puls Biznesu
RWE to follow in footsteps
of Vattenfall?
Industry experts predict that German energy company RWE may
withdraw from the Polish market, although the company says it
has no plans to divest its Polish assets, as Vattenfall is planning
to do. Vice president of RWE Poland, Janusz Moroz, told Puls
Biznesu that the company is not investing in new capacity in Poland
apart from only in alternative – mainly wind-powered – energy.
Source: Puls Biznesu
Company Petrolinvest to
look for shale gas
Petrolinvest intends to obtain concessions to search for shale
gas, Rzeczpospolita reports. The paper suggest the company
has applied for two licenses for exploration of oil and natural
gas in Warmia and Mazury and also wants to buy another con-
cession on the secondary market. Petrolinvest would not itself
undertake oil and gas exploration in Poland and would focus
on providing services to drilling operators. Thomas Tarnowski
of Petrolinvest told the paper that the company is in talks with
American partners and has received proposals for cooperation
in the search for shale gas in Poland.
Source: Rzeczpospolita
PGNiG to spend PLN
5.6 billion in 2011
Vice president of finance at PGNIG, Slawomir Hinc, has told Parkiet
that the company will increase its capex this year by more than
10% to PLN 5.6 billion in search for oil and gas domestically and
abroad, with spending on exploitation of deposit PLN 2.8 billion.
Production from the Norwegian Skarv, in which PGNiG has an
11.9% stake, starts in August. To date, the Polish company has
invested $760 million in this project. Extracted annually from the
reservoir will be 400,000 tons of oil and 0.5 billion cubic meters.
Hinc also confirmed plans to launch later this year a gas produc-
tion trial in Pakistan.
Source: Parkiet

Shale Gas Solutions

- breakfast series
The first in a series of breakfast conferences
branded “Shale Gas Solutions” was held on
the 20th of April at the Sobanski Palace in
Warsaw, Poland. Spearheaded by Jakub Ko-
stecki from the firms New Gas Contracting
and EnergyJobsCEE, the series is designed to
offer real world solutions to unconventional
gas operators and vendors operating in Poland.
Legal support for the topic of the day - land
title and permitting issues - was provided by
Piotr Spaczynski from SSW.
The panelists addressed a lot of the issues fac-
ing concession holders, operators and service
operators when it comes to acquiring the
proper permits and land titles required to
operate in the field in Poland. Acquiring land
title and permits through direct negotiations
with landowners proved to be the highlight
of the morning.
More than 25 of the top people in the sector
came out for the event, including representa-
tives of 8 concession holders and some of the
top vendors in the industry.
The next breakfast will take place in early June
and will cover permitting issues related to
explosives and hazardous materials. If you’re
interested in learning more contact Malgorzata
Kos (mkos@newgas.pl) at New Gas Contracting.

6
PGNiG starts negotiations with
Gazprom over gas prices
“PGNiG on March 1, in Moscow began negotiations with Gazprom
on the reduction of prices for gas supplied under the Yamal con-
tract. The second round of negotiations were held later in March
in Warsaw,” Gazeta Prawna reports. Polish oil and gas company
PGNiG argues that Poland is the fourth largest recipient of Rus-
sian gas in the EU and pays more than the French, Czechs and
Austrians. The paper quoted information published by the Rus-
sian daily “Vedomosti,” which shows that Germany pays $271 per
1000 cubic meters and Austria pays $304 dollars. For comparison,
Poland paid last year $336
Gas prices for Ukrainians
to rise by 30%
The IMF has agreed to reduce the burden of rising gas prices for
Ukrainians by hiking prices by 30% instead of 50%. In mid-April
gas prices for households will increase by 20% and then in June by
about 10%. In line with the IMF this year, the government hiked
prices by 62% and also increased tariffs for municipal services.
Source: Gazeta Wyborcza
Putin extends Gazprom
chief’s contract to 2016
Gazprom boss Alexei Miller will stay at his post for the next five
years, instructed Russian Prime Minister Vladimir Putin. The Rus-
sian press had been speculating that his position was under threat
and that he would be replaced. But Putin signed a statement that
by March 22 Gazprom’s Board of Directors must approve Miller’s
extension for a further five years. The 49-year-old manager has
been chairman of the Gazprom board since 2001.
Source: Gazeta Wyborcza
Future for Nabucco natural
gas pipeline in doubt
The development of the Nabucco natural gas pipeline, intended
to reduce the European Union’s dependence on Russian energy
supplies, faces major challenges that threaten its future, according
to analysts and members of the consortium backing the ambi-
tious project. The estimated cost of the 3,300-kilometer-long, or
2,050-mile-long, pipeline has ballooned and the consortium is still
struggling to line up suppliers for Nabucco, which is designed to
carry 31 billion cubic meters, or 1.1 trillion cubic feet, of natural
gas a year from the Middle East and the Caspian region to markets
in Europe. EU officials say 2011 is the make-or-break year for
the project. “Either it is this year or it is not feasible,” said Mar-
lene Holzner, a spokeswoman for the EU energy commissioner.
Nabucco was originally budgeted at €7.9 billion. But according
to an internal study by BP, it may cost €14 billion to finish the
pipeline. That threatens to make the venture unprofitable. Nabucco
would carry gas from the Caspian region and the Middle East,
through Bulgaria, Romania and Hungary, to a hub just outside
Vienna. From there, the gas would be distributed to customers
throughout the EU. The consortium of energy companies behind
the project has two options, according to EU officials and analysts.
7
One option is to abandon Nabucco after nearly a decade of plan-
ning and development. Were that to happen, it would mean not
only a missed opportunity to diversify EU energy supplies, but a
major loss of influence and prestige for the EU in the increasingly
important Caspian region. The other choice is for Nabucco to be
merged with another pipeline to make it more attractive to inves-
tors, gas suppliers and consumers. “The attention is now on the
economics of Nabucco, not the political aspects of using Nabucco
to weaken Europe’s dependence on Russian gas,” said Borut Grgic,
a senior fellow at the Atlantic Council. Europe relies on four major
suppliers for its natural gas: Russia, which provides 41%; Norway,
which provides 27%; Algeria, 17%; and Nigeria, 5%. Russia is the
EU’s single most important energy supplier over all, accounting
for more than 25% of the bloc’s consumption of oil and gas, ac-
cording to the European Commission, the EU’s executive arm. That
dependence was underscored when price disputes led Russia to
briefly cut natural gas supplies to Ukraine in 2006 and to Belarus
in 2009. That led to serious shortages in parts of Eastern Europe,
and spurred the European Union to step up its efforts to secure
alternative supplies of energy. The consortium behind Nabucco
comprises many of Europe’s largest energy companies: RWE of
Germany; OMV of Austria; MOL of Hungary; Botas of Turkey;
Bulgaria Energy Holding of Bulgaria; and Transgaz of Romania.
With Bulgaria and Romania still grappling with the impact of
the global economic crisis, it is far from certain if their state-run
energy companies could afford a bigger investment in Nabucco.
“I do not know how the Nabucco consortium arrived at the €7.9
billion figure in the first place. I could never see it costing less than
€12 billion,” said Jonathan Stern, director of gas research at the
Oxford Institute for Energy Studies. “And consider the price of
iron ore, which is used for steel pipelines. It has risen by 50% over
the past year.” In Vienna, where Nabucco is based, a spokesman
played down BP’s €14 billion cost estimate. He also discounted
the possibility that the start of construction would be delayed.
“The current figure of €7.9 billion is based on the Nabucco feasibility
study which was completed in 2005,” said Christian Dolezal, the
Nabucco spokesman. “These figures are currently under review.
Any other figures released in the meantime are speculations and
not accurate. We do not have an investment issue, therefore no
delay.” Johannes Vetter, a spokesman for MOL, said there were
“no final numbers on the table,” adding, “We will know in a few
weeks if there will be delays.” Even if the pipeline is completed,
there is the issue of finding natural gas to fill it. The consortium
has been banking on Azerbaijan, which has vast reserves of gas.
But those fields have not yet been developed. BP is the project
operator of the Shah Deniz II field in Azerbaijan, and holds a
25-percent stake in it. For months, Nabucco has been negotiating
to obtain gas from the Shah Deniz II field. But the Azeri govern-
ment has yet to decide whether it will sell gas to Nabucco or to
some other pipeline operator. Elshad Nasirov, vice president of
Socar, Azerbaijan’s state-owned oil and natural gas company, said
recently that Shah Deniz II could only guarantee 10 billion cubic
meters of gas for export, less than one-third of Nabucco’s capacity.
“We do not promise additional gas,” he said. “Everything depends
on the price.” The EU is now lobbying for Nabucco to merge with
one of the other projects. Joschka Fischer, the former German
foreign minister and now consultant for RWE, proposed during a
meeting of energy experts in Vienna last month that the Southern
European pipeline projects should be integrated. “It would make
sense,” Fischer said. “Business interests would be brought together,
but above all it would allow Europe to diversify.” Together, the
three pipelines would be able to supply Europe with about 53
billion cubic meters of gas a year. Nabucco confirmed that talks
were taking place. “We understand that there is a discussion on
a political level,” said Dolezal, the Nabucco spokesman. But, he
added, “Nabucco can be realized and stand alone.”
Source: The New York Times
PGNiG increases supply
of gas to PKN Orlen
Polish oil and gas company PGNiG has lifted the restrictions on its
natural gas supplies to PKN Orlen that were introduced on March
2 due to persistent low temperatures and increasing consumer
demand for natural gas. The decision was taken on the basis of the
existing commercial contracts between the companies, providing
the opportunity to reduce supply.
Source: Cire.pl
Kulczyk starts drilling at
Olgovskoye Field in Ukraine
Kulczyk Oil Ventures has announced that the O-9 well in the
Olgovskoye Field commenced drilling on the March 5, 2011.
The drilling of the O-9 well is expected to take about 35 days.
The O-9 well is located approximately 1.2 kilometres to the
northwest of the O-8 well, will be drilled to a depth of 2,600
metres and is designed to test gas-bearing reservoirs in the Lower
Bashkirian and further develop the gas production capability of
the Olgovskoye Field. The O-9 well is the second new well drilled
in the Olgovskoye field since the company acquired its interest
in KUB-Gas in June 2010. It is part of a larger development
program on the KUB-Gas assets through 2011.
Olgovskoye Field
With the successful tie-in of the O-7 well in late 2010, the Olgo-
vskoye Field now produces from 4 wells (O-3, O-4, O-5 and O-7)
with each well producing from a separate horizon. Kulczyk Oil
completed drilling of the Olgovskoye-8 well in early January
and the well is awaiting testing and tie-in as a producing gas
well. The O-8 well was drilled to a total depth (“TD”) of 2,780
metres and wireline logging of the open hole identified multiple
potential hydrocarbon-bearing zones. The O-8 well was cased
to TD in preparation for completion as a producing gas well. A
service rig is currently on the O-8 location and the completion
of the well will commence shortly. Information about the O-8
well was disclosed on February 3, 2011.
Update on M-19 well
The recently drilled M-19 well in the Makeevskoye Field has
been tested at 5 million cubic feet per day (“MMcf/d”) of natural
gas with an estimated four barrels per MMcf of condensate and
no water. The well flowed at a stabilized flowing pressure of
1,700 psig through a 10 mm choke over a seven hour period.
Regular production of the M-19 well is expected to commence
late in the second quarter of 2011 after all necessary regula-
tory consents have been received and the pipeline connection
to the KUB-Gas production facility has been completed. The
well is expected to produce between 3 and 3.5 MMcf/d (2.1 to
2.45 MMcf/d net to the 70% Kulczyk Oil interest in KUB-Gas).
Current KUB-Gas production is approximately 6 MMcf/d (4.2
MMcf/d net to KOV).
8
Kulczyk Oil is very pleased with the results of work done on the
KUB-Gas assets since the acquisition in June 2010. The work
program for 2011 will principally target the comprehensive
and efficient exploitation of the Olgovskoye and Makeeevskoye
Fields. This will involve the drilling of new wells, the completion
of new zones in existing wells, dual completions, stimulation
treatments using modern and technically advanced methods
commonly used elsewhere in the world and the effective im-
plementation of a compression strategy.
Source: Kulczyk Oil Ventures
Hawkley says production
from Sorochynska Well #201
in Ukraine’s Dnieper Donets
basin “progressing well”
Hawkley Oil and Gas announced that commercial production
from the Sorochynska Well #201 in Ukraine’s Dnieper Donets
basin is “progressing well” and the company has received its
first revenues from gas sales. During the production start-up
period, optimisation of the processing equipment to yield the
maximum gas and liquids from the well, will be determined.
Production commenced on February 17th with the well run-
ning on a 6mm choke producing flow rates of 5.29 million
cubic feet per day (mmcfpd) and 176 barrels of condensate per
day. The data from the well-including a well head pressure of
a constant 3,750PSI – indicates that once Hawkley achieves
the optimal configuration of the processing equipment, a
substantial increase in the flow rate through a larger choke is
expected. Hawkley is selling gas at a gross price of US$ 9.32 per
thousand cubic feet (mcf). Liquids are currently being sold at a
US$ 104 per barrel. Total operating costs including production
taxes, gas and liquids processing costs, transportation costs
and overheads run at around 30-33% of revenue. Initially gas
will be sold forward on the local market, on a monthly basis.
Condensate is currently being sold every three days, also on the
local market. Following the completion of the start up phase,
the company will consider a longer term off-take contract.
ASX traded Hawkley expects Well #201 is expected to gener-
ate significant cash flow, with Chief Executive Officer Richard
Reavley commenting that performance so far indicates the well
will be able to run at rates much higher than the initial rate.
“The new processing equipment we have installed at the local
gas plant has integrated well with the existing facilities and
early analysis of the gas and liquids and the reservoir data looks
highly promising,’’ Reavley said. “We expect to have the well
producing around twice what we are seeing at the moment in
the very near future.”
Source: Hawkley Oil & Gas Limited
KGHM TFI wants to finance
the construction of a gas
block in Blachownia
Copper investment company KGHM TFI has announced it will
finance investments in Tauron power plant’s construction of a
new block at Blachownia, Puls Biznesu reports. Arkadiusz Gieralt,
deputy president of KGHM TFI, said the fund would cover financing
of the estimated PLN-1.1 billion cost for the Blachownia project.
KGHM wants to create a special fund from pension funds for this
Market reports
Petroleum Club Magazine is continuously working with our information partners to provide
you with as much in-depth knowledge into specific markets and sectors. Below is some brief
information about this month’s latest reports. For more information on purchasing the full
version please contact craig.smith@petroleumclubmagazine.com

Bulgarian shale gas report

Bulgaria has recently seen its share of publicity with regard to shale gas potential. The truth is that shale
gas development has not matched the pace of Poland or arguably Ukraine. Worse, a major confirma-
tion of mineable deposits in either country could prompt a battle of costs and pragmatism that could
effectively see Bulgaria left out in the cold. Nevertheless, shale gas potential has prompted political
debate, rumblings from Russian Gazprom and even pointed lobbying by U.S. Ambassador to Sofia,
James Warlik. This report serves as both a primer for those researching Bulgarian shale gas potential,
as well as a commentary on the shale gas race that could affect all Central European countries in the
near future.

History and geopolitics in Polish shale gas

The shale gas boom may be on in Central Europe, but a number of factors should give cause for a re-
think, if not a profound change in strategy with regard to the future of what has been pitched as the
ultimate game changer not just for Poland, but for the region. In the following report, CEE Consulting
Group takes a provocative look at the current Polish government’s relations with U.S. officials on both
gas and international issues, the somewhat schizophrenic take on shale gas development and the real
barriers facing shale gas in the near- and mid-term.

Environmental lobby (Poland)

At present the main environmental concerns in Poland are not up to speed on the potential ‘shale gale’
that could swarm on Poland and the wider CEE region. However, with increased media exposure, they
are slowly but surely getting their act together. In this report, we give a full up-to-date briefing on the
main environmental organizations in Poland and what their current positions on shale gas. The report
will point who are the organizations that a company should be wary of, and who a company operation
in Poland may potentially co-operate with.

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10
project. Rafal Markiewicz, manager of Generali OFE, told PB he
was “sceptical” about the idea.
Source: Puls Biznesu
Belarusian anti-nuclear groups urge
government to halt nuclear plans
Belarusian anti-nuclear groups have urged the government to
“learn from the tragedy in Japan” and relinquish plans to build
a nuclear power plant in the country, opposition Swaboda Radio
reported. “We call upon the Belarusian authorities to desist from
plans to build a nuclear power plant and seek investment for the
modernization of traditional energy and renewable energy de-
velopment,” an unnamed source said. “We want to remind them
that the hasty development of design documentation blocks in
Chernobyl was one of the causes of the disaster.” Belarus and
Russia have prepared a preliminary agreement to build a nuclear
power plant and at the same time Belarus is seeking a loan from
Russia of $9 billion.
Source: PAP
Tauron Group revenues
up 13% in 2010
Polish power company Tauron’s revenues increased last year by
nearly 13% to more than PLN 15.4 billion, with an EBITDA up
almost 5% to PLN 2.8 billion. The Tauron Group reported in 2010
revenues of PLN 15.4 billion mainly the effect of growth in the
volume of energy generated and sold, as well as revenues from its
distribution and sale of heat. Last year the group noted growing
demand for energy resulting in an increase in volumes produced,
distributed and sold. A significant proportion of demand met by
its own sources; 21.3 TWh produced by the manufacturing seg-
ment in 2010, 14.4% more than a year earlier, of which 1.1 TWh
is energy produced from renewable sources, where volume growth
was 12.7% year-on-year.
Source: Puls Biznesu
Warsaw Stock Exchange confirms
start of talks to acquire TGE
Stock Exchange President Ludwik Sobolewski told Puls Biznesu
that initial talks about the acquisition of the Polish Power Ex-
change were being conducted, adding that the exchange is worth
about PLN 300 mln.
Source: Puls Biznesu
Tauron refutes PGNiG link in
Vattenfall acquisitions
Gazeta Prawna reports that the Polish power group Tauron is
interested in purchasing the Polish assets of Vattenfall, but
contrary to earlier announcements, will not submit a bid jointly
with PGNiG, Tauron’s deputy chief Krzysztof Zawadzki said.
PGNiG is interested in purchasing only Vattenfall Heat Poland.
Others interested include PGE and Finnish Fortum, the paper
reports, adding that Vattenfall has not started any sales process
yet. Zawadzki said he expected Vattenfall to start selling at the
beginning of April.
Source: Gazeta Prawna
11
Polish government says it
won’t alter nuclear plans
The Polish government spokesman Pawel Gras confirmed that
Poland will not be reviewing plans for the construction of the
country’s first nuclear power plant. He said that security will be
one of the main criteria taken into consideration when choosing
technology. The Ministry of Economy says construction will begin
in 2016, and when completed the plant should have an estimated
2020-3000 MW generating capacity. The end of 2013 is expected
to see a decision on location of the plant.
Source: Gazeta Prawna
Opole plans wind farm
A wind farm is planned for the municipality of Zdzieszowice, with
funds coming from Poland Electrawinds Belgian, which has for the
last two years been seeking to build a wind farm in Poland. The
facilities will be in Krepna on Oder, and should have four to six
turbines after three years. “We have to establish the conditions for
connection to the network and are now just waiting for the adoption
of the municipal zoning plan,” Electrawinds Poland CEO told PB.
Source: Puls Biznesu
Construction of Belene nuclear plan
to go ahead: Bulgarian PM says
Bulgaria does not intend to abandon plans to build new nuclear
reactors and sees no need to slowdown work on its second power
plant, Belene. Its builders, the Russian company Atomenergoprom,
said they will provide give additional security. “The tragedy in Ja-
pan will not become a reason to cancel the power plant at Belene,”
Prime Minister Boyko Borisov said. The Minister of Economy
and Energy Trajczo Trajkow did not rule out a slowdown to the
Belene project
Source: PAP
Belarus freezes Kulczyk Holding’s
power plant construction project
Belarus has frozen construction of a power plant in the country by
Kulczyk Holding (KH), which the daily Gazeta Wyborcza reports
is now increasing disinterest in the investment. KH signed an
agreement regarding the construction of a power plant with a
subsidiary of state-owned Bielenergo in August last year in Warsaw.
The reason for the Belarusian decision is reportedly the recent
cooling of Polish-Belarusian relations after the post-December
crackdown and alleged Polish support for the opposition. KH
planned a PLN 1.5 billion coal-fired power plant with a capacity
of 1,000 MW in Zelwa located approximately 70 kilometres from
the Polish border. Half of the energy produced by the plant was
to be delivered to the Polish market and half to Belarus.
Source: Gazeta Wyborcza
Hungary’s MOL’s interested
in Poland’s Lotos
Hungarian oil and gas company MOL is interested in buying a 53.2%
share in the Polish oil group Lotos, two people familiar with the
matter told Dow Jones Newswires. Also reportedly interested are
Russia’s OAO Gazprom Neft and TNK-BP Holdings, Polish company
PGNiG and several private equity funds. Investors have until April
29 to submit applications to the Treasury, and the ministry then
has until May 13 to make its decision. Grupa Lotos is the second
largest - after PKN Orlen - fuel producer in the country. The treasury
holds a controlling stake in the company based in Gdansk, with 53%.
Source: Dow Jones Newswires
Poland’s Treasury Ministry completes
talks with Rafako over ZE PAK sale
Poland’s Treasury Ministry has said it has completed negotiations
with Rafako over the sale of power generator ZE PAK, although
Solorz-Zak is reportedly dictating terms. The Treasury wants to
float PAK on the stock market and I reportedly concerned if the
company’s mining assets may not discourage Solorz. PAK and its
mines need huge investments to continue to operate. Last week, the
Treasury decided to complete the privatization process of Pątnów-
Adams-Konin and two brown coal mines, “Adams” and “Konin.”
Source: CIRE.pl
PGNiG may start extraction of
shale gas as soon as 2014
Polish daily Rzeczpospolita reports that Polish oil and gas com-
pany PGNiG may start extraction of shale gas as soon as 2014.
PGNiG, which recently concluded its first successful drilling for
shale gas near Wejherowo, plans to spend the next few months of
testing the outcome of this exploration, according to its deputy
head Marek Karabula. Meanwhile, other drilling exercises will
be carried out – their effects should be known within two years.
If they prove successful, PGNiG could start the production of
shale in three years, Karabula stressed. Experts have estimated
that the extraction of unconventional gas could start only in
seven to eight years. Karabula said that according to the model
assumptions, the Wejherowo concession could produce 300mn
cu.m. of gas annually (Poland’s annual consumption is around
14bn cu.m.).
Source: GoWarsaw
PGE to invest over PLN
5 billion in 2011
Polish energy company PGE invested PLN 5.3 billion in 2010, mainly
in conventional energy (PLN 3.8 billion) and distribution (PLN 1
billion) and plans to increase investment activity in 2011 to over
PLN 5 billion. The company aims to build a new unit, although
commissioning of the installation has been suspended for a few
months due to defects caused by the contractor. PGE also wants to
continue further investment in the mining sector and plans this year
to continue research on fluidized gas at Złoczew. The company also
has permission to study more distant in time longer-term deposits
of Gubin. The coming weeks are expected to see the company unveil
its new strategy, with 100 MW of wind energy turbine reportedly
high on the agenda. The company said in a statement that plans
to grow both through acquisitions and organically.
Source: Gazeta Wyborcza
12
Gazprom and Slovenia’s
Geopolin Plinovodi agree to
form JV in support of South
Stream gas pipeline
Gazprom and Slovenian gas distributor Geopolin Plinovodi have
agreed to form a venture in support of the South Stream gas
pipeline. “I am sure this project will bring a certain benefit to all
participants and will ensure reliable energy supplies in Slovenia
and other European countries,” Russian Prime Minister Vladimir
Putin said in Ljubljana. The parties, which will each hold 50% of the
venture, will have to seek an exemption from the European Union’s
directive on the segregation of gas suppliers and pipeline operators.
Putin held talks with Slovenian officials, including Slovenian Prime
Minister Borut Pahor, to assure them that the pipeline is on track
following comments by Russian deputy prime minister and Energy
Minister Igor Sechin last week that indicated that Russia could drop
South Stream altogether. He made the comments after Putin again
floated the idea of building liquefied natural gas terminals on the
Black Sea to supplement the underwater pipeline, which analysts
said conflicted with the purpose of the pipeline project. Putin said
although Russia is currently studying “different versions” of the
pipeline construction but “nothing will stop us from carrying out
the South Stream project.” South Stream was originally promoted
as an easy way to export gas across the region bypassing the busy
Bosporus straits, while ships carrying Russian liquefied natural
gas would congest the strait. Some analysts believe the LNG idea
was a way of putting pressure on Turkey to support South Stream
because the transport by ships would sideline Turkey from the
project. “We do not think that there is any threat to this project
from our Turkish partners,” Putin said. Slovenia, which buys about
600 million cubic meters of gas a year from Gazprom, was among
the Balkan countries whose supplies were disrupted during a gas
dispute between Russia and Ukraine
Source: Bloomberg
KGHM buys shares in MSP Tauron
KGHM on March 23 bought 71 million shares in Tauron Polish
Energy in the treasury’s surprise floatation, paying PLN 6.15 per
unit, the company said in a statement. As a result, KGHM increased
its share to 10.39%. “The acquisition of shares in Tauron Poland
Energy is related to the implementation of the KGHM Polish Cop-
per’s strategy for 2009 - 2018, which provides for diversification
of income sources and the entry into the power sector,” the report
said. KGHM Polish Copper in June bought 4.9% of the original
offer of shares in Poland Tauron Energy.
KGHM will continue to buy
Tauron, not interested in ZE PAK
KGHM President Herbert Wirth has told PAP that KGHM will
continue to buy shares in Tauron in order to increase its stake to
11.32%, but is not interested in buying shares in ZE PAK. “Tau-
ron is our natural partner in power,” he said. President of Enea,
Matthew Shepard, said he had not ruled out the company taking
part in Patnow-Adams-Konin a big power generating company in
Poland, sometimes called ZE PAK, up for sale, most likely this year.
Source: PAP
Enea wants to take over EC Bialystok
Enea reportedly wants to take control of CHP, Elektrocieplownia
Bialystok, adding to the 30% it bought in December 2008 from
the treasury. Germany’s E.ON plans to sell the remaining shares,
which it acquired from French SNET, a strategic investor in the
plant. Puls Biznesu reports that Enea has reached the due diligence
stage. The takeover may go ahead in May. The value of a 70% stake
in EC Bialystok is estimated at over PLN 400 million.
Source: Puls Biznesu
PGE to have wind farms with
a capacity of 1,000 MW by 2015
Polish energy group PGE aims by 2012 to have wind farms with
a capacity of 250 MW and 1,000MW by 2015 and will spend over
PLN 400 mln to achieve this.
Source: Parkiet
Poles divided on nuclear power plant
48% of Poles are opposed to the construction of a nuclear power
plant in Poland, according to a poll by TNS OBOP for public televi-
sion programme “Forum”. 46% believe nuclear power should be
used in Poland, with 6% not having an opinion. The government
plans the first reactor in the country to begin by the end of 2020
and to have two power plants with total capacity of 6,000 MW
by 2030. Prime Minister Donald Tusk said that the construction
of a nuclear power plant in Poland should be “accepted by society
[because] without social acceptance of this kind it [the plan] does
not make sense.” He did not rule out a referendum on the plans.
TNS OBOP conducted a telephone survey on March 23-24 on a
representative sample of 1,000 adult Poles.
Source: Gazeta Wyborcza
Polish PM Tusk talks of Poland
“moving towards greater
energy independence”
At a ceremony held in Swinoujscie on Poland’s Baltic coast to lay the
cornerstone of the future liquefied natural gas terminal, Polish Prime
Minister Donald Tusk spoke of the nation moving towards greater
energy independence. “Poland will be a country secure in terms of
gas supplies and a country able to trade it in case of surpluses,” said
Tusk. “Taking into consideration Polish natural gas deposits, the
long-term contract with Russia, the long-term contract with Qatar
and the infrastructure, investments in gas pipelines and intercon-
nectors, as well as the increasingly intensive and promising search
of shale gas, we can believe that during the next three, thirteen or
even thirty years Poland will not be a gas giant but a country secure
in terms of gas supplies” the PM said. “The LNG terminal is a key
element of a set of investments and economic, financial and politi-
cal projects which are aimed at establishing Poland’s and Europe’s
energy security.” The Swinoujscie liquefied natural gas terminal is
expected to cost some PLN 3 billion. Construction should be com-
pleted in 2013, with the terminal expected to be fully operational
in June 30, 2014.
Source: wnp.pl
13
Over a dozen companies
place bids for Warsaw heat
and power plant SPEC
Over a dozen companies – Polish and foreign - have placed bids for
Warsaw heat and power plant SPEC and a decision will be made on
April 20 as to who will be invited to the next phase - due diligence.
Up to 85% of SPEC will be sold. “We are pleased with the strong
interest of investors in purchasing shares of SPEC SA. Competition
between potential buyers should make it easier to negotiate the
best trading conditions under which the final decision is taken,”
vice president of communications at SPEC, Jaroslaw Kochaniak,
said. The book value of SPEC is estimated at about PLN 1.5 bil-
lion and the Warsaw City’s 2011 budget estimated it will get PLN
750 million from the sale. SPEC is a leading provider of heat in
Poland, providing about 80% of the Polish capital’s heating needs.
Source: PAP
Choice of investor for Lotos
Group seen at end-2011
The selection of a strategic investor for Lotos Group is planned for
the turn of 2011/2012, Treasury Minister Aleksander Grad said,
adding that the investor must offer to buy the entire package of
53.19% in a single tranche. Grad said the Treasury wants to sell
to a single Source: ISB
Source: Rzeczpospolita
Ukraine and Eni to cooperate
in traditional and alternative
energy production
Ukraine and Eni SpA have reached an agreement to cooperate in
traditional and alternative energy production. A Ukrainian gov-
ernment statement announced the memorandum of cooperation
during a meeting between the Ukrainian Minister for Ecology and
Natural Resources Mykola Zlochevskiy and Eni Director General
Paolo Scaroni. “The company and the ministry have agreed on
cooperation aimed at studying joint initiatives in the sphere of
traditional and alternative gas and oil resources based on the
exchange of information, experience and technologies,” said the
statement, published on the Ukrainian government’s website.
Ukraine has been studying the possibilities of developing its shale
gas resources, which are believed to be amongst the largest in Europe
Source: RIA Novosti
Vattenfall launches sales
of its Polish assets
Wyborcza.biz reports that Sweden’s Vattenfall has officially begun the
process of selling its Polish assets. A person close to the transaction
told the paper that Vattenfall is in contacts with potential investors.
Source: Gazeta Wyborcza
Zeta Petroleum to start work at
Romanian natural gas field Bobocu
Zeta Petroleum plans to start work on the Romanian natural gas
field Bobocu, in Buzau County. Its partner company, Cooper Energy,
will invest a minimum of US$16 million in the first development
phase of the natural gas field. Zeta signed a concession agreement
with the National Agency of Minerals and Resources in Romania
in 2007 for the Bobocu field. Zeta was granted an enlargement of
the Bobocu concession in 2008. The Bobocu concession contains
a mature biogenic gas field that Zeta intends to bring back into
production by drilling new development wells and, where possible,
working over existing wells. Romgaz discovered the Bobocu gas
field in 1966. It was placed on production in 1977 but was aban-
doned in 1995 due to problems of sand influx in well boreholes
from producing reservoirs. Zeta is now working towards drilling
a new well in the field in Q4 2011, according to company data.
Source: Romania Business Insider
MSP losing patience
with EDF over Enea
Negotiations on the sale of shares in Polish (Poznan-based)
power generator Enea is not likely to be extended after the
deadline expired at the end of March, Rzeczpospolita reports,
claiming that a person close to the transaction says the French
conglomerate has set an ultimatum demanding an end to talks
by the end of March. Treasury Minister Aleksander Grad has
said that if it were necessary the deadline may be extended.
Source: Rzeczpospolita
Wind farm to be built near
Slupsk Kobylnica
Puls Biznesu reports that a wind farm will be built the near
Slupsk, at Kobylnica, consisting of 18 turbines with a total
capacity of over 41 MW. The farm’s investor - Eco Energy, a
Spanish company, part of the Taiga Mistral Group - is slated
to start work in late 2011 and 2012. Siemens is the supplier of
the wind turbines.
Source: Puls Biznesu
Kulczyk Investments back in
the race to buy 51% of Enea?
President of Kulczyk Investments Darius Mioduski in an in-
terview with Rzeczpospolita published on Monday said his
company would strive to renew negotiations with the Treasury
Ministry over purchase of a 51% stake in power generator Enea
after the Treasury last Friday March 31 issued a statement of-
ficially announcing it had suspended talks with Frrance’s EdF.
The ministry’s statement says EdF’s offer failed to meet the
conditions placed on potential investors. Mioduski told the daily
that his company had met all the requirements set by Treasury
Petroleum Club Magazine – May 2011 – Volume 1 No.3
Published by ECE Media,ul. Lucka 15 office 313, 00-842, Warsaw, Poland, tel+48 604 144 769, Fax: +48 586 30 10
www.petroleumclubmagazine.com, In partnership with Energy Recruitment Institute – www.energyrecruitmentcee.com
Publisher - Craig Smith, e-mail: craig.smith@petroleumclubmagazine.com, tel: +48 604 144 769
Editorial & Research Director - Jo Harper, news@petroleumclubmagazine.com
Art Director - Krzysztof Cichy, chris@europaproperty.com
Journalists and Contributors - Jakub Kostecki, Katarzyna Kajka, Jakub Zlamaniec
Copy editor - Matthew Day
14
Minister Aleksander Grad, offering a “significant premium for
control over Enea” and would not need any external financing
to undertake the purchase.
Source: Rzeczpospolita
San Leon Energy provides update on
its exploration activities in Poland
The acquisition of 60 sqkm of 3D seismic data over Szczecinek
Block 106 (San Leon 50%) was completed by the end of Janu-
ary 2011. Data processing was concluded on 15 March 2011
and interpretation is now expected to be completed by early
June 2011; with an exploration well planned for Q3 2011. The
seismic company, Geofizyka Krakow, is currently acquiring 480
km of 2D seismic data over San Leon’s Gdansk W Concession in
the Baltic Basin. The programme is expected to be finalized by
mid April 2011. Geofizyka Krakow will deploy a second seismic
crew for the Braniewo and Szczawno Concessions at the end of
March 2011. The entire seismic programme is expected to be
completed by June 2011. Seismic processing is being carried
out in real-time to select final drilling locations for the upcom-
ing three well drilling programme. The full 480 km 2D seismic
programme is 50% complete and a drilling rig has been booked
for 1 August 2011, which will be used to drill three back-to-back
wells. Geofizyka Krakow has also been contracted to acquire
100 km of 2D seismic over the Company’s 100% owned Nida
Concession, which is on trend with some of Poland’s largest oil
fields. The acquisition of this seismic is planned to commence
at the end of March before drilling locations are finalised for an
upcoming drilling programme. Up to three wells will be drilled,
with an expected start date by end of June 2011. San Leon has
awarded Hungarian company, Acoustic Geophysical, with the
contract to acquire 165 sqkm of 3D seismic data over the Com-
pany’s Nowa Sol Concession. The 3D seismic programme, which
is expected to commence in May 2011, is targeting numerous
prospects and leads along the southern Fore Sudetic Monocline
of the Permian Basin. This survey is designed to support an up-
coming drilling campaign in the Nowa Sol Concession which is
currently planned to start in Q4 2011. Work is continuing in the
Carboniferous shale play across the Wschowa, Gora, Winsko and
Rawicz Concessions, which cover 880,000 acres. Core analysis
and interpretation of historical seismic data is being carried
out. The seismic programme across this acreage is scheduled to
commence in Q3 2011. San Leon also provided an update on
its other activities, including the Tarfaya Oil Shale project in
Morocco where its pilot project is well advanced. The drilling
of two wells (one injector and one producer) began last week
and first results are expected towards the end of next month.
Source: San Leon Energy
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