Canadian Company Claims to Find Large Oil Reserves in Poland

New York Times

6 days ago

The fall of the Berlin Wall in 1989 raised hopes for oil and gas exploration by Western companies in the former Soviet bloc in Europe, but a burst of drilling activity by companies like Chevron and Exxon Mobil in the 2010s produced mostly disappointment.
Now, explorers from a small Canadian company say they have found in Poland what could be the largest petroleum discovery in Northern Europe in more than a decade in the shallow waters of the Baltic Sea near the border with Germany.
The oil company, Central European Petroleum, said in a news release that recent drilling at a well near Swinoujscie, in northwest Poland, has revealed an estimated 200 million barrels of 'recoverable' oil and natural gas.
If confirmed, this trove would be welcome in Poland, which consumes 740,000 barrels a day of oil. Like most European Union members, Poland relies mostly on imports.
But the prospect of a new oil development on the Baltic coast has already led to environmental concerns in neighboring Germany.
The chief executive of Central European Petroleum, Rolf G. Skaar, said in an interview that the field might eventually produce up to 40,000 barrels of oil a day.
'It's quite a surprise for this to come in offshore Poland,' said Lewis Lawrence, an analyst at Wood Mackenzie, an energy consulting firm. 'It's not an area where there has been that much offshore activity.'
Mr. Lawrence said that the find, known as Wolin East, would be the largest in northern Europe since 2013 if it proves out and could strengthen what had been weak interest in exploration in Europe, especially in the Baltic.
The European Union has seen a steady decline in oil production in recent decades, partly because of objections to drilling on environmental concerns.
The Polish discovery was the result of around two decades of exploration, including digging into geological records from the Soviet era, Mr. Skaar said.
He said that Alula Damte and Peter Putnam, the president and chairman of the company, went to 'old libraries, both in old East Germany and in Poland, scouring for data.'
The company also drilled several wells in Germany, before figuring that there were likely to be larger hauls across the border in Poland. 'We've also been able to get hold of data on both sides of the border, which means we see the bigger picture,' he said.
The company is backed by money from family offices in Norway and Canada as well as other private investors, said Mr. Skaar, an oil industry veteran.
Other investors, though, would probably be brought in to aid in developing the discovery. Mr. Lawrence of Wood Mackenzie estimated that the development costs would be around $1 billion.
The field should be relatively easy to bring online because it is in shallow water about 30 feet deep. It is also only roughly four miles from Swinoujscie, a port that could be used as a base for construction.
Swinoujscie already has a liquid natural gas receiving terminal built by Poland to help break its energy dependence on Russia.
Mr. Skaar said that one approach being considered would involve building an artificial island at the site.
The discovery provoked dismay in Germany, where authorities and locals on the island of Usedom, home to a popular seaside resort, expressed concern that an oil platform visible from the beach would keep tourists away, depriving the region of a crucial source of income.
'The project represents a backward-looking industrial policy in terms of climate policy, which runs counter to environmental and tourism interests on the German side,' said Till Backhaus, the minister for the environment of Mecklenburg-Western Pomerania, the state with jurisdiction over the island.