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Poland Announces Six-Year Tax Break For Shale Industry

by Ulrika Lomas, Tax-News.com, Brussels

14 March 2014


Poland's parliament is to consider Government proposals to exempt the shale gas industry from special taxes until 2020.

The move was announced by Prime Minister Donald Tusk, who said that securing a domestic supply of gas security is a matter of national sovereignty, which will free Poland from the threat of "gas blackmail." Tusk also confirmed that after the end of the tax break, taxes would not exceed 40 percent of income.

In January, Poland's Supreme Audit Office complained that shale gas exploration was proceeding too slowly, in part due to licensing hold-ups. The Office's report also noted that the legal framework remained unclear, and that this was deterring foreign investors. ExxonMobil, Marathon Oil, and Talisman Energy have all pulled out of shale exploration in the country, despite estimates that Poland may have between 346bn and 768bn cubic meters of recoverable shale gas.

January further saw the departure of Eni, which cited unfavorable geology, but also a successful test by a Dublin-based company, San Leon (SLE) Energy Plc. Chevron and ConocoPhillips are currently the only large-scale international companies exploring for shale in Poland.

Tusk said expected exploration and production to accelerate "dramatically" once the legislation has passed.

Poland imports 60 percent of its gas supplies from Russia. At the start of 2009, it had to make alternative arrangements when Russia temporarily stopped supplying Ukraine due to a debt dispute.

TAGS: tax | corporation tax | oil and gas | Poland | tax breaks

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