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30.09.2011 PGNiG SA starts the Flame of Hope campaign

Polskie Górnictwo Naftowe i Gazownictwo SA has started the Flame of Hope campaign. Its purpose is to collect the largest possible number of votes in support of an appeal to Members of the European Parliament to refrain from activities aimed at stopping shale gas exploration and production. To take part in the campaign, please cast your vote on the http://www.plomiennadziei.eu/ website.

The Flame of Hope campaign was initiated on September 29th 2011 during the educational workshop in Lubocino near Wejherowo, where shale gas was first produced as part of well testing more than a fortnight ago. The purpose of the workshop was to address the local community's doubts and concerns related to unconventional gas exploration, including its environmental impact.

In the opinion of Deputy Minister of State Treasury Mikołaj Budzanowski, who participated in the workshop, production of shale gas would give Poland a chance to gain energy independence and the exploration work is being conducted in compliance with the applicable laws, including environmental ones.

 "We are seeking support for our initiative, the aim of which is to convince Europeans and the EU decision makers that double standards, which is what the proposed new directive concerning shale gas production would boil down to, must be avoided" Mikołaj Budzanowski said.

Also Marek Karabuła, Vice-President of the Management Board of PGNiG SA, Petroleum Mining, spoke about how important it was to win support for the shale gas exploration project in Poland.

"We hope that we can transform that natural treasure into Poland's success and development. A public hearing at the European Parliament will be held on October 5th and I will request the European Commission to refrain from taking any any action aimed at restricting activities related to shale gas production. This is why we are requesting everyone's support vote, to avoid the introduction of a ban on such activities by the European Union," President Karabuła added.

Exploration for shale gas and shale gas discoveries can positively contribute to the national economy. Production of shale gas is an opportunity to create new jobs and raise living standards both today and in the future. Poland is the first European country which may be able to start large-scale production of shale gas. That is why PGNiG SA decided to request members of the European Parliament not to take any action aimed at suspending exploration for and production of unconventional gas.

PGNiG SA is taking pains to mitigate the impact of its gas exploration operations as much as possible, taking into account even the minutest aspects. "We will carry out shale gas production reasonably, so as to minimise its environmental impact and nuisance to local communities," said Marek Karabuła.

Wejherowo is one of the 15 licences held by PGNiG SA. The Company's operations carried out to date on the Lubocino-1 well, located within the Wejherowo licence area, have confirmed potential presence of shale gas resources.

It is important to note that the Company has monitored the environmental impact of those operations since the very beginning.

"We comply with all the national and EU requirements. PETROGEO of Wołomin carried out an environmental monitoring study before the drilling started, and experts from the University of Warsaw made a second study after the drilling of Lubocino-1 well (before fracturing). The results indicate that we entered a clean area and we have managed to keep it clean, and that all the applicable standards have been complied with. Soon, a post-fracturing environmental monitoring study will be performed," assured Grzegorz Sojski, Head of the Environmental Protection Office at the Company's Head Office.

The study showed that the analysed environmental parameters were typical for natural soil and water processes and indicated no contamination which might be attributable to the operations on the Lubocino-1 well.

Environmental monitoring is a good practice which has been consistently applied in PGNiG SA's operations. It involves on-site field visits, description of elements of the environment in the area of the drilling rig, analysis of soil, subsoil and soil air conducted in the area of the drilling rig and its surroundings, as well as analysis of water from the nearest surface watercourses and farm wells located near the drilling rig.

In addition, drill cores from the Lubocino-1 well have been tested for radioactivity by Instytut Nafty i Gazu (The Oil and Gas Institute) of Kraków. The results of the tests indicate that, compared with other materials and products which people deal with every day (e.g. ash produced by burning coal), the radioactivity of shale rocks is much lower.

Mr Sojski added that fracturing would not cause earthquakes and that it would not pose any threat to the earth surface, buildings or anything else on the surface.

"Moreover, it must be noted that the impacts of shale gas production are predictable. They are controllable, temporary and localised. Most of them are only potential. It needs to be added that apart from reports whose conclusions cast an unfavourable light on shale gas exploration, there are also other studies, e.g. prepared in the United Kingdom and the Netherlands, according to which the fracturing technology does not raise concerns," said Mr Sojski, adding that none of the numerous reports prepared by independent experts, governmental institutions and with the support of scientific and research organisations, presented a case where drinking water was confirmed beyond any doubt to be contaminated as a result of properly conducted fracturing operations.

Currently, PGNiG is preparing for horizontal drilling and further fracturing operations in the licence area. The work will take at least a year, but after it is completed, the launch of commercial production will be possible. The schedule of work includes: the drilling of a horizontal well (Lubocino 2H), fracturing treatments, well testing and evaluation of the actual recovery potential.

If the work proceeds according to plan, it will be possible to start test production in the second half of 2013, while commercial production will come onstream in 2014.

Work on the Wejherowo licence commenced last year. The drilling of a vertical well targeting a zone some 3.5 kilometres deep, on which production testing has already started, ended in March 2011.

PGNiG is currently planning to undertake more drilling work, expecting to spud six new wells next year. By 2015, it intends to invest a total of PLN 4.1bn in shale gas exploration and production.

Preparations are also under way to start drilling within another licence area - Tomaszów Lubelski (Lubycza Królewska well).

Press Team

PGNiG SA

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