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POLAND TO OFFER EXPLORATION CONCESSIONS

May 27, 1991

Poland this year likely will offer its first oil and gas exploration concessions to foreign companies since World War II. The former Communist nation this summer plans to begin promoting its oil and gas potential to international oil companies as it seeks to open that sector to foreign investment. The promotion will include offering exploration concessions on specified blocks. Poland's government listed these steps to establish a legal, fiscal, and regulatory framework for participation by

Poland this year likely will offer its first oil and gas exploration concessions to foreign companies since World War II.

The former Communist nation this summer plans to begin promoting its oil and gas potential to international oil companies as it seeks to open that sector to foreign investment. The promotion will include offering exploration concessions on specified blocks.

FRAMEWORK ESTABLISHED

Poland's government listed these steps to establish a legal, fiscal, and regulatory framework for participation by foreign companies in its oil and gas sector. It:

Designated the Ministry of Environmental Protection, Natural Resources, and Forestry as responsible for negotiating, licensing, and administering exploration and "exploitation" concessions. Warsaw noted the state retains ownership of hydrocarbon resources, but exclusive exploration rights will be awarded with the right to an exploitation concession in the event of a commercial discovery.
Plans to release a report on Poland's petroleum geology and hydrocarbon potential prepared by Robertson Group plc and Polish Oil & Gas Co. (POG)
Soon will complete a draft model exploration and production contract that forms the basis for oil and gas investment and operations.
Is preparing a tax and royalty agreement form.

PROSPECT PACKAGES

The ministry intends to prepare prospect packages to be available this summer for "bona fide exploration companies" but is willing to meet with "serious" companies prior to the promotion.

Robertson reports meetings with several companies have been held within the past year.

However, seeking to dispel rumors, the Polish government said no foreign company to date has acquired a petroleum concession in the country.

About 2 years ago, Amoco Production Co. and POG signed an agreement for a nonexclusive exploration study covering a 30 million acre area (OGJ, Aug. 7, 1989, p. 31).

The study was recently completed, and Amoco has expressed interest to the ministry in an exclusive exploration concession covering part of the study area.