The British Poles decided to ask an expert in the extractive industry for an assessment of the scale of the recently announced discovery of oil and natural gas deposits by the Canadian company Central European Petroleum (CEP). Wojciech Labuda, Director for Regulatory Affairs at the Polish Organisation of Oil Industry and Trade (POPiHN), responded to our questions. While he shares the optimism of those welcoming the discovery, he also points out the need for key infrastructure investments and puts the scale of the discovery into perspective relative to Poland’s national hydrocarbon demand.
Tomasz Modrzejewski, British Poles: First of all, how would you assess the scale of this discovery and the potential it brings in terms of extracting new oil and gas deposits near Świnoujście?
Wojciech Labuda: I believe we should welcome every hydrocarbon discovery in Poland with enthusiasm, given that we are primarily an importer. Domestic production covers only about 2–3% of the country’s oil demand, and around 20–25% in the case of natural gas. Reducing dependence on imports, which come with additional costs, is something to be pleased about – extracting our resources is always somewhat cheaper. It also strengthens the country’s energy and fuel security. Exploiting domestic deposits removes potential threats to supply chains. So the scale of the discovery is very encouraging and demonstrates that our geological resources still hold untapped potential. However, this single discovery will not significantly alter Poland’s overall situation when it comes to hydrocarbon supply.
TM: How do the forecasts presented by CEP translate into the potential for actual extraction?
WL: If we compare what CEP has announced in their preliminary findings – a deposit containing 22 million tonnes of oil and 5 billion cubic metres of gas – with Poland’s national hydrocarbon demand, we need to temper expectations. Firstly, these figures refer to recoverable resources. Only once we determine the size of the industrial reserves – technically and economically extractable – will we get a real picture. These numbers will therefore still be subject to further verification. To assess the announced discovery’s potential, consider that current domestic oil production is about 1 million tonnes, which is less than 2% of annual demand, which totals around 27 million tonnes. A deposit estimated at 22 million tonnes means, then, less than one year’s worth of consumption. Extraction from this deposit could, of course, double or triple current domestic oil production, but it would still represent only a small portion of the country’s overall demand.
TM: Does the ratio look different when it comes to natural gas?
WL: As for the discovered natural gas, with deposits containing about 5 billion cubic metres, it helps to put this into perspective. Poland consumes around 17 billion cubic metres of gas annually, with domestic production accounting for roughly 4 billion. So 5 billion, even if fully extracted, would roughly equal one year of current domestic production. Therefore, this single discovery does not change Poland’s overall gas supply situation, although it will certainly help maintain the current production capacity. It’s also worth noting that natural gas is considered a transitional fuel in the energy transformation process, associated with significantly lower CO₂ emissions than coal. Utilising this fuel – especially from domestic sources – is thus an investment in a greener economy.
TM: From an economic standpoint, will Poland benefit from exploiting these deposits?
WL: It’s important to remember that the project is still at the exploration stage – only one exploratory well has been drilled so far, so we’re still in the early phase. In media statements, the company has said it is currently seeking partners for future extraction – a process that involves significant technological challenges. Key to this will be the creation of infrastructure to extract both oil and gas. When it comes to oil, this is somewhat easier – it can be transported using tankers, for instance, to the Port of Gdańsk for refining. For natural gas, however, a suitable pipeline will need to be built. Fortunately, the proximity of the discovered deposits to the LNG terminal in Świnoujście and the Baltic Pipe gas pipeline will make this somewhat easier, but these are still investments that will require billions of złotys overall.
From an economic perspective, this is potentially a profitable and viable investment – not just for the entity undertaking the extraction, but also for the state and local governments, which will benefit from associated extraction-related revenues.
TM: Can we say at this point whether domestic companies involved in the distribution and extraction of hydrocarbons will benefit from these newly discovered deposits?
WL: It’s hard to predict who will end up as CEP’s partner. However, it’s worth remembering that Poland is where the oil industry began in the 19th century, and since then, domestic deposits have been continuously exploited. Therefore, Polish companies have the necessary resources and experience to become partners in the project. But this is a matter for the future and will depend on the decisions of individual companies.
TM: Thank you for the interview.
Tomasz Modrzejewski
