Polish News Roundup 12-16.3: Industrial Development Agency to invest in renewable energy

Poland’s Industrial Development Agency (IDA) announced plans to invest increased funds into Euro-Eko, a company which converts rubbish into oil, Polish economic daily Puls Biznesu reported.

The IDA’s new strategy involves supporting the company’s [Euro-Eko] operations by participating in an investment program which stipulates, the construction of more alternative oil plants.

Company CEO Wojciech Dabrowski admits that obtaining the resources – the litter for conversion – is quite difficult. Not only are the public tender procedures complicated, but the competition seems to be applying unfair tactics to discourage the agency. The entire process of obtaining the required environmental permits is also very time-consuming.

This considerably extends the time line of any kind of investment in the incineration sector. Dabrowski is currently looking for partners to provide the Agency with the required technology to combust litter and cost-effectively convert it into oil or electric energy.

It is currently in talks with a Canadian company called Plasco Energy Group but the latter is also considering opening a new facility in Poland by itself leaving the IDA with the only other solution – to look elsewhere.

The IDA currently has PLN 5 bln to spend on the alternative energy.

Polish government plans to abolish social Church Fund 

Polish Administration and Digitalization Minister Michal Boni announced that the government plans liquidate the social Church Fund, which subsidizes the Roman Catholic Church and all other religious organizations in Poland, Polish daily Rzeczpospolita wrote Friday.

In exchange the government will provide Polish citizens with the possibility of writing off 0.3% of the VAT to religious organizations.

The social Church Fund has been financed solely by the state since 1990. It was founded to compensate the Church for the property that was taken from it during World War II and the subsequent socialist period.

Presently, the fund’s key role is sustaining its priests and institutions (including covering social insurance).

The government’s proposal was met with outrage amongst members of the Church community. This is partly because during the last round of negotiations the Polish Finance Minister Jacek Rostowski promised the Church that the fund will remain untouched, and partly due to the perspective that emerges from the proposal.

Church representatives doubt that the change in funding would bring the Church the PLN 100 mln calculated by the government (the fund’s annual budget for the Catholic Church totals some PLN 90 mln).

Experts on religious law state unanimously that should the government vote through its proposal, it will be against the Constitution and the Concordat. Lawsuits are likely to follow.

Polish PM signs EU fiscal treaty amendment

In signing an amendment to the EU fiscal treaty Poland’s PM Donald Tusk confirmed the country’s readiness to accept the new fiscal order in the EU, Polish daily Rzeczpospolita wrote Friday.

European leaders signed a new fiscal treaty on March 2 aimed at preventing 17 euro-zone countries from suffering crippling budget deficits that have led to the current debt crisis.

Opposition politicians in Poland are furious and have accused Tusk of signing the deal without consulting government.

Rzeczpospolita alos gained access to e-mails exchanged by Deputy Economy Minister Andrzej Dycha and Cabinet Secretary Maciej Berek, in which the officials express their disbelief and outrage at the fact that Tusk signed the document without consulting its full contents with his Cabinet.

The amendments reportedly also regulate procedures to be followed before the Tribunal of Justice should a member state break the treaty.

“This is yet another scandal related to signing this document,” opposition party PiS MP, and member of the Polish Parliamentary Committee for EU-related matters, Krzysztof Szczerski told the newspaper. “When Tusk informed us about its content, he never said a word about agreeing to additional regulations. We cannot be one-hundred percent certain what we agreed to by signing the document.”

Szczerski stated that he is considering filing an application to open an investigation into the circumstances behind signing the treaty – especially as two other member states (Belgium and Bulgaria) declined to sign.

Geological Institute to make estimate on Polish shale

The Polish National Geological Institute is expected to issue a report detailing the exact scale of Polish shale resources on March 21, Polish daily Rzeczpospolita reported Friday.

The estimation will be made based on samples from wells throughout Poland.

So far, estimations vary between 5,300 bln cubic meters (made by the Energy Information Agency) to 1,000 bln cubic meters (by Rystad Energy).

Polish Treasury Minister Mikolaj Budzanowski is very optimistic about Poland’s prospects.

“Irrespective of whether we have resources totaling 1,000 or 2,000 bln cubic meters, it will be enough to satisfy our national energy consumption for dozens of years,” he said.

Budzanowski announced that the process of shale gas commercialization will begin at the turn of 2014/2015. In the Minister’s opinion, yearly extraction output of shale gas will total between 0.5 and 1 bln cubic meters at the initial stage of commercialization to finally reach 5-10 bln in following years.

Experts agree that such a forecast is realistic, provided that the estimated size of resources will match actual statistics. However, they point out that an extensive set of new regulations is a key step in the process.

UPDATE: The report estimates that commercially viable shale gas resources in Poland range between 346 bln and 768 bln cubic meters, which is ten times less than originally anticipated by the US Energy Information Agency.

Polish oil no.2 Lotos to launch project with American Calenergy Resources

Polish no.2 oil and gas player Grupa Lotos is in talks with American Calenergy Resources to launch an extraction project, Polish economic daily Puls Biznesu wrote Thursday.

Following the government’s unsuccessful attempt to sell its 53% stake in Lotos – in December 2011 – the press speculated over plans to merge it with gas company PGNiG. The speculations were dispelled, however, by the Treasury.

Lotos’ CEO Pawel Olechnowicz made a counter proposal; instead of selling the stake, which is a complicated and time-consuming process without any guarantee of success, Lotos could simply look for strategic partners for concrete projects.

This week, American energy concern Calenergy Resources confirmed that it is conducting negotiations with Lotos regarding launching joint exploration projects within Lotos’ shale gas and conventional gas permits on the Baltic Sea.

Lotos is financially engaged in various exploration projects in Norway and Lithuania for which it needs fresh capital injections. A source at Lotos told Puls Biznesu that the giant is looking for partners poised to invest between PLN 200-700 mln on one or more of these projects.

“Both parties want to close the negotiations by end of June,” a source at the company told the newspaper.

Company subsidiary, Lotos Petrobaltic, holds 11 shale and conventional gas and oil concessions on the Baltic Sea. It is also engaged in an extraction concession on the Norwegian oilfield Yme.