Poland Proposes Tax Breaks for Shale Gas Industry – by Patryk Wasilewski (Wall Street Journal – March 11, 2014)


The Country is Trying to Reduce Its Reliance on Russia

WARSAW—Poland offered six-year tax breaks to the shale gas industry on Tuesday to speed up exploration work and reduce the country’s reliance on Russian gas amid rising tensions in Ukraine.

Over the past few years Poland has been building pipelines connecting it with European Union neighbors to the west and south, as well as a liquefied natural gas port on the Baltic coast allowing it to bring in imports from Qatar.

It has also awarded shale-gas exploration licenses and urged domestic state-controlled companies to drill. Concern over the tax system and future regulation has prompted some international majors to leave.

In an effort to address this, Prime Minister Donald Tusk said the government decided not to charge special taxes, specifically designed for the shale gas industry, before 2020. The proposal will be sent to parliament within two weeks and Mr. Tusk said he hoped for “speedy proceedings” on the issue, especially given the Russian-Ukrainian tensions next door.

“Today gas security is a fundamental prerequisite of sovereignty of every European country, including Poland,” Mr. Tusk said, adding Poland has to do all it can to be free from “gas blackmail.”

With natural gas imports from Russia covering over 60% of the country’s annual needs, potential disruptions to supplies for Poland are a key concern for the country, which has had to reduce deliveries to domestic customers in the past few years amid quarrels between Russian and Ukrainian over prices and payments.

Mr. Tusk added that the issue of gas supplies will be discussed during the upcoming visit of Germany’s Chancellor Angela Merkel’s visit to Poland, scheduled for Wednesday.

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