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Poland promises tax breaks for shale gas exploration

PR dla Zagranicy
Nick Hodge 12.03.2014 11:26
The Polish cabinet has approved a belated draft law that will offer a six-year tax break for companies involved in the extraction of shale gas.

Prime Minister Donald Tusk talks to the press following a cabinet meeting on Tuesday. Photo: PAP/ Radek Pietruszka

Lack of clarity in the law had prompted some major international companies, including Marathon Oil and Exxon Mobil, to pull out of their shale programmes in Poland.

However, at a press conference on Tuesday, Prime Minister aimed to allay some of those fears.

“Taxation on the extraction of shale gas will only become a reality after 2020,” he assured.

He added that after the six-year period has elapsed, taxation “should not exceed more than 40 percent of the income."

Poland's bid to tap into its shale gas resources is partly as a means of being less dependent on Russian natural gas.

With Polish-Russian relations currently severely strained over the Ukrainian crisis, Tusk underlined the necessity for Poland to free itself from what he called “gas blackmail.”

Tusk will be discussing dependence on Russian gas in Warsaw on Wednesday with German chancellor Angela Merkel.

A January report by Poland's Supreme Audit Office (NIK) warned that at the current rate, it will take 12 years before the country's shale gas potential can be properly assessed.

However, Tusk has said that the draft law should act as “a huge incentive” to speed up the process.

The government hopes that the legislation will be brought before parliament within the next two weeks. (nh)

Source: PAP

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