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Mr Szubski recalled PGNiG Group's strategy, updated a few months ago, which focuses on developing the exploration and production business and building an integrated energy conglomerate. The key focus areas of the strategy include intensified exploration activity, which will bring about higher production of natural gas (including shale gas) from the Polish fields, and building the power generation segment.

"We are facing great opportunities and great challenges. I think we are able to rise to those challenges. Shale gas is a great chance not only for PGNiG, but also for the entire country," Mr Szubski said.

Other panelists included Mr Mikołaj Budzanowski, Undersecretary of State at the Ministry of State Treasury; Mr Janusz Steinhoff, Chairman of the Programming Board at the National Chamber of Commerce; Mr Marek Karabuła, Vice-President of the PGNiG Management Board in charge of petroleum mining; Mr Peter Arp, E.ON Ruhrgas AG Vice-President, CEE Sales; Mr David Loughman, Shell Vice-President, Exploration and Production in Norway; and Mr James Walcutt, Vice-President, Encana International (USA).

"Shale gas may prove to be a good solution not only for Poland, but for the entire EU economy," Minister Budzanowski said. Having taken the floor, Mr Budzanowski concentrated particularly on the issue of respecting the environmental laws and regulations while conducting exploration work.

"Every EU member state has the right to independently choose the energy sources it deems best for it. This is a privilege warranted in relevant treaties," added Mr Budzanowski. He also pointed to the restrictive environmental laws effective in the EU.

"We see no need to create special new regulations concerning one specific, in this case shale gas," the minister said. He assured that Poland was monitoring all activities at the EU institutions related to unconventional gas and would be raising at the EU forum the need to intensify the work relating to exploration for shale gas.

Mr Janusz Steinhoff in turn pointed to the role that the gas industry can play in the Polish economy. He referred in particular to the climate package and in this context to the possibility of using gas to generate power. He emphasised that the pace of implementation of the climate package will be of paramount importance both to the Polish and the EU power industry.

"I do not find the arguments put forward by the opponents of shale gas to be convincing. The discussion about shale gas lacks matter-of-fact arguments. Shale gas is an opportunity for us. The steps concerning Poland's energy security which have been taken over the last few years are reasonable. Continuity of supplies is not the only issue. It is also Poland's negotiating position in talks about the price of the commodity with one of our key suppliers that matters. The work which has been done in connection with exploration for shale gas gives a tentative message that shale gas can potentially be produced. This is a great opportunity for Poland to improve its energy security, especially in the context of using shale gas for power generation purposes. I believe that we will be constructing gas-fired power plants. In fact, such projects have already been started, the Stalowa Wola CCGT unit being a case in point. Shale gas is an opportunity not only for Poland. I think it will change entire Europe, just like it changed the US, where success of shale gas brought down gas prices not only nationwide but also worldwide, as it considerably reduced prices of liquefied gas," Mr Steinhoff said.

"It is in the interest of Poland, but also in the interest of entire Europe, to develop shale gas exploration," said Mr Peter Arp, drawing attention to the fact that there is a vast potential for economic use of shale gas in the European market. "If the price is good, there will be customers for the gas," Mr Arp added.

Mr James Walcutt emphasised the significance of good quality of regulation and availability of support services and transport infrastructure as those elements which determine how quickly production of unconventional gas can start after its reserves have been discovered.

Mr Marek Karabuła reminded that PGNiG was the first licence holder to carry out a fracturing operation in the Markowola-1 well in the Pionki-Kazimierz licence area. That first fracturing operation was performed in compliance with all the relevant environmental standards. The second fracturing operation was carried out by PGNiG last week in the Lubocino-1 well near Wejherowo.

"Results of the analyses we have carried out so far support our belief that we have significant gas resources. We will be drilling more directional wells in the Wejherowo licence area. We will also embark on a drilling programme in another licence area of Tomaszów Lubelski (the Lubycza Królewska well). We will be drilling research and appraisal boreholes to optimise our work both in respect of horizontal drillings and fracturing operations. Such operations are not cheap and that is why we have to look closely at the costs," Mr Karabuła said.

So far, PGNiG has contracted fracturing services from foreign providers, but as Mr Karabuła said, the Company is prepared to transfer this knowledge to the Polish ground so that the PGNiG Group companies currently providing drilling and well support services are able to perform such treatments as well.

Mr Karabuła said that PGNiG would be seeking to obtain more licences. He assured that PGNiG was able to meet all the challenges associated with exploring for shale gas. These involve the necessity to drill hundreds of boreholes and the ability to secure the required financing. He reminded that PGNiG intended to spend by 2015 about PLN 14.7bn on exploration and production, and that the Company was also interested in tight gas.

PGNiG currently operates 1,725 wells connected to 78 oil and gas production facility systems.

Joanna Zakrzewska

Spokesperson for PGNiG SA