Poland considers changes to its hydrocarbon licensing scheme (Part 2 of 2)

Under both the current law and the proposed Act, the Ministry of the Environment has authority to grant and limit licenses. Under the Act, however, the Minister of the Environment has a stronger and more authoritative regulatory role. For instance, the Minister is obliged to commence proceedings to withdraw licenses under certain conditions. Conditions include but are not limited to (1) failing to start conducting activities as provided for in the license, (2) permanent halting of license activities, (3) conducting activities outside of the licensed time schedule, and (4) failing to maintain adequate documentation.

The Hydrocarbon Act contains several inter-temporary provisions that deal with existing hydrocarbon license holders and other related parties.

All exploration and extraction licenses issued before the Hydrocarbon Act becomes governing law will remain in full force. Extraction licenses will become licenses under the meaning of the Act. Generally, holders of exploration licenses will be authorized to apply to the Ministry of Environment to convert their licenses into licenses under the Act.

According to data provided by the Ministry of Environment, as of May 2014, Poland has granted 101 licenses targeting shale gas. The first drilling to explore for shale in Poland began in June 2010. As of 2014, 63 exploratory drillings have been completed. Poland has not granted a single shale extraction license— to date, all existing shale licenses are exploration licenses.

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This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.