Analyst questions Orlen’s shale gas tech bid rationale

05 September 2013 11:37  [Source: ICIS news]

LONDON (ICIS)--Plans for Poland’s PKN Orlen to access shale gas technology and know-how via the possible acquisition of shale gas assets abroad are not particularly cost effective or rational, an investment bank said on Thursday.

“We believe a much more cost effective and rational strategy to access technology and know-how would be to farm out parts of the Polish [shale gas exploration] licences,” said Robert Rethy, an analyst at Prague-based WOOD & Company, noting that such a move has previously not gained government support.

“It is still not too late to attract partners, but valuations are clearly depressed and appetite is limited due to the disappointing drilling results seen so far in Polish unconventional plays,” he added.

On 30 August, the investment bank cautioned that the failure of one of Orlen’s Polish shale gas test wells – Syczyn, a well in the Lublin Basin of southeastern Poland that has been drilled and horizontally fractured, or “fracked” – to show deposits in commercial volumes showed investors needed to modify their expectations on the potential of Poland’s unconventional gas reserves.

“Also, we find it somewhat too risky for Orlen’s profile to focus almost exclusively on unconventional plays in exploration and production,” Rethy said.

State-controlled Orlen’s main activities are currently in oil refining and petrochemical production.

By: Will Conroy
+44 20 8652 3214

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