Chevron to Stop Shale Gas Exploration in Poland

U.S. energy major Chevron (CVX) Corp said it will stop exploring for shale gas in Poland, a sector that has failed to live up to its early promise of transforming eastern Europe's energy supplies.

Chevron's Polish unit "has decided to discontinue shale gas operations in Poland as the opportunities here no longer compete favourably with other opportunities in Chevron's global portfolio", the company said in a statement.

Exxon Mobil (XOM), Total and Marathon Oil (MRO) have also stopped shale gas exploration in Poland over the past three years.

They, and other energy firms, were originally attracted by estimates of massive shale gas reserves in Poland.

But since they launched exploration, the estimates have been downgraded, geological conditions for drilling have proved difficult, and industry executives complain of uncertainty about government regulation.

In the past few months, the sharp fall in world energy prices has forced energy majors to make cuts in spending and pull the plug on faltering investment projects.

Shale gas is under a cloud too in Romania, where Chevron is also active. Prime Minister Victor Ponta said in November last year it seemed likely Romania has no shale gas, despite the efforts to find it.

Governments in eastern Europe, especially Poland, Romania and Lithuania, embraced shale gas enthusiastically because they saw it as a way of reducing their reliance on imported energy from Russia.

They view those imports as a source of vulnerability because they have tense relations with the Kremlin, and their supplies have been disrupted in the past.

However, eastern Europe is already diversifying supplies by other means, mainly through importing liquefied natural gas from supplies such as Qatar, and by building better connections with western Europe's gas pipeline network. (Reporting by Christian Lowe; Editing by Mark Heinrich)