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Poland Nixes Shale Gas Taxes Until 2020
In an attempt to lure foreign investment back to its shale natural gas plays following several high profile defections, the country’s finance minister said a severance tax on unconventional production will take effect in 2015 but no tax would be levied until 2020.
“Our intention is to encourage businesses to extract shale gas,” Finance Minister Jacek Rostowski said in a translated comment at an economic forum in Warsaw on Wednesday.
According to reports, Poland is considering a tax exemption on gross receipts for coalbed methane production to 1.5% and reduced severance taxes on offshore production of 3%. A bill that would raise the severance tax on oil and gas to 40% of gross receipts also is being considered.
“As in the case of production from unconventional sources, we are proposing to apply reduced rates of tax on hydrocarbons extracted from the seabed because of the high cost of such projects,” Rostowski said, according to the Polish Press Agency. “The costs are greater than those from inland mining.”
Data from the U.S. Energy Information Administration indicates that Poland imported a record 416 Bcf of natural gas in 2011, the most recent year available. Nearly 90% of the gas imports in 2010 were from Russia.
Earlier this month, Marathon Oil Corp. and Talisman Energy Inc. separately said they were pulling out of the country (see Shale Daily, May 10). Marathon is still mulling its options over a 1.2 million net-acre leasehold, but it anticipates leaving by the second half of 2014. Talisman is transferring its Polish stakes to San Leon Energy plc in a deal valued at $10 million. ExxonMobil Corp. last year ended its exploration efforts (see Shale Daily, June 19, 2012). Chevron Corp. and ConocoPhillips also have operations in Poland (see Shale Daily, March 14, 2012; Oct. 27, 2011).
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