US shale gas has “redrawn” global energy map – PKN Orlen chief

08 March 2013 14:46  [Source: ICIS news]

LONDON (ICIS)--The CEO of PKN Orlen said on Friday that the company recognises that the global energy map has been redrawn by the shale gas revolution in the US, and that it must address the question of how it can exploit the changed situation to its advantage.

Following his participation  at the IHS CERAWeek energy conference in Houston earlier this week, Jacek Krawiec said in a statement: "We need to ask ourselves how to run a business amid a profound technological breakthrough. What does it hold for us?

“Should we stay where we are, in the downstream segment, or should we go upstream? Are the new technologies a blessing or a curse for oil refining companies? These are the key questions that companies which derive most of their revenue from downstream operations, including PKN Orlen, have to consider," he added.

Krawiec said: "Ground-breaking [shale gas] technologies have helped tap into unconventional hydrocarbon resources in North America and have largely contributed to advancing all three energy policy priorities: energy security, job creation, and the shift to a low-emissions economy."

Orlen is set to spend more than a billion euros on unlocking shale gas resources in Poland, though some analysts have questioned whether the commitment is too risky. On 28 January, Erste Group Bank put a 'Sell' rating on Orlen's stock, partly because of its shale gas strategy.

However, Krawiec said he was convinced that Europe's shale gas resources offered the EU a much-needed opportunity to boost its economic growth.

"Over the last decade the shale gas success story in the US has turned natural gas from a scarce and costly fuel to a much cheaper, more readily available resource obtainable from domestic sources. Today we can also see that the American shale gas boom could be replicated for tight oil," he added.

The conference heard Stephen Pryor, President of ExxonMobil Chemical Company, appeal to the US government to greenlight natural gas exports.

The government's blockage of exports of liquid natural gas (LNG) made from shale gas, driven by concern that selling gas overseas would cause US gas prices to rise, should be removed, Pryor said.

Turning to Europe's efforts to limit industrial and other carbon emissions, Krawiec said they were a failure, with Europe's carbon emissions rising 8% between 2010 and 2012.

"Grim statistics reveal the sad truth about the seemingly eco-friendly mechanisms devised and implemented by a centre of power with ambitions to shape global climate policy – the EU instruments simply do not work,” Krawiec said.

“European Union institutions should read this inconvenient emissions data as a warning sign and the ultimate cue to devising solutions that will enable member states to implement an effective energy and climate policy on a global scale," he added.

By: Will Conroy
+44 20 8652 3214

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