Shale Gas in Poland - the Legal Framework for Granting Concessions for Prospecting and Exploration of Hydrocarbons

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Synopsis: The article explains from the practical point of view the procedure for the acquisition of a concession for prospecting and exploration of hydrocarbons in Poland. Based on this analysis arguments are presented in support of a thesis that the current legal framework in Poland concerning the prospecting and exploration of hydrocarbons strongly protects the energy interests of the country.

I. INTRODUCTION

Recently newspapers all over the world reported that vast reserves of shale gas are believed by experts to exist in Poland.1 For instance, The Sunday Times reports that "Wood Mackenzie, the oil and gas research group, estimates that there could be as much as 48 trillion cubic feet (1,36 trillion cubic metres) of unconventional gas stretching across northern and central Poland."2 Polish officials believe that exploitation of shale gas in Europe could change its energy paradigm and climate policy of the country.3 The finding of shale gas could free Poland from its energy dependency on Russia.4 Poland could become a major exporter of this resource, enriching its economy.

The Geological and Mining Law5 in Poland grants benefits to companies which successfully explore for hydrocarbons. The entrepreneur who explored and documented a mineral deposit being the property of the State Treasury and prepared geological documentation with the accuracy required for granting of a concession for mineral exploitation, may demand the establishment of the mining usufruct for its own benefit, with priority over other parties.6 Encouraged by the prospect of finding huge deposits of shale gas, which they could then benefit from, foreign companies are seriously investing in prospecting and exploration of this resource.7

This article will explain from the practical point of view the general procedure for the acquisition of a concession for prospecting and exploration of hydrocarbons in Poland.8 If the resource is found, another concession for the exploitation of the hydrocarbon is required. This however remains outside the scope of this paper.9

Several arguments will be presented in support of a thesis that the current legal framework in Poland concerning the exploration and prospecting of hydrocarbons strongly protects the energy interests of the country. From the analysis of the regulatory structure it may be inferred that its drafters had the foresight to develop a system that will protect from and reduce the potential adverse effects of intensified interest in the State's strategic resources. This potentially may be attributed to vast reserves of coal that exist in Poland.

To enhance the readability of this article a brief outline of the procedure for the acquisition of a concession for the exploration and prospecting of hydrocarbons in Poland will be presented first.

II. BRIEF OUTLINE OF THE PROCEDURE

The following outline presents a step-by-step guide for obtaining concession for prospecting and exploration of hydrocarbons in Poland.

The steps are as follows:

1. Obtain a mining usufruct right - an agreement with the State Treasury.

2. Apply for the concession for the prospecting and exploration of hydrocarbons.

The application should include:

* the designation of the applicant (address, number in the register of entrepreneurs or official business record);

* designation of the type and scope of business activities that are going to be included in the concession;

* designation of the applicants rights to the plot on which the activities are going to be performed or the designation of the right that the applicant is applying for;

* designation of the time period for which the concession should be granted along with the date from which the activities are going to be performed;

* designation of resources available to the applicant to effectively carry out the activities that are in the scope of the application;

* geological work programme. …