Chevron, PGNiG join forces on shale gas exploration in Poland

Warsaw (AFP) - US energy giant Chevron on Thursday signed a preliminary agreement with Poland's PGNiG to join forces on shale gas exploration in southern Poland, the firms said.

"Both parties could profit from sharing the exploration risk and from reduced costs, including the potential cost of developing the reserves," PGNiG acting CEO Jerzy Kurella said in a joint statement.

The announcement comes weeks after Poland said it would begin commercial production of shale gas next year, making it the first European country to use the controversial technique known as fracking.

Polish Environment Minister Maciej Grabowski, who has been on the job since a cabinet reshuffle last month, has said that exploiting shale gas at home will be "his priority".

Chevron and PGNiG have yet to hammer out the details but plan to sign a final agreement as early as next year, according to the statement.

They said that if their exploration efforts succeed, they could form a joint company with each holding a 50-percent stake. The company would take over four licences in southeastern Poland, two currently held by PGNiG and two by Chevron.

The state-controlled Polish firm currently holds a total of 16 exploration licences in Poland, while Chevron has four.

Polish Prime Minister Donald Tusk said in September that the central European country of 38 million people would anchor its energy strategy in coal and shale gas, with only limited investment in renewables.

Concerned about its energy security, Poland hopes to exploit its shale gas reserves estimated at between 800 and 2,000 billion cubic metres.

The EU member currently imports about two-thirds of the 14 million cubic metres of natural gas it uses annually from Russia.

The government plans to invest 12.5 billion euros ($16.9 billion) by 2020 in its shale gas sector.