THE PROBLEM OF OWNERSHIP AND LEASE OF OIL-BEARING LANDS IN INTERWAR POLAND
Authors: MASYK Roman 
Published: December 2024

The article's primary objective is to examine the ownership of oil-bearing lands in interwar Poland, where these territories were predominantly privately owned, though the state held some areas where crude oil extraction was possible. The central thesis posits that during the interwar period, the recognition of landowners' primacy in controlling oil reserves contributed significantly to the decline of the Galician oil industry. Following World War I, the Polish authorities were tasked with restructuring the ownership of mineral deposits, including oil, to align with the post-war realities. Under Austrian oil law, oil deposits were subject to the "norm of accession," which allowed landowners to either extract oil themselves or transfer these rights to third parties in exchange for financial compensation. Over time, speculative markets for oil extraction rights emerged, driving up the cost of crude oil production, with landowner payments sometimes comprising up to a quarter of total production expenses. This practice was unique to Poland in the post-war context and severely hampered the competitiveness of Polish oil companies in foreign markets.
Given the dramatic decline in crude oil production after the First World War and the urgent need to finance new exploration efforts, a transformation in the ownership structure of oil-bearing lands became imperative. This necessitated abandoning the “norm of accession”. Two main approaches to reform were considered: the first was the establishment of a “regal” system, where the state would hold exclusive rights to oil deposits; the second involved the introduction of "mining freedom," whereby any entity could engage in oil extraction under state regulation and permitting.
Immediately after Poland regained independence, the government sought to depart from the “norm of accession”. In 1919, the Ministry of Industry and Trade initiated an in-depth analysis of oil law, and the Chamber of Industry and Commerce in Lviv began efforts to codify oil legislation. In 1921, the Krai Oil Society proposed changes to oil law, and by 1924, the State Oil Council had commissioned the preparation of legislative drafts. Although the idea of adopting the "norm of mining freedom" received broad support from the oil industry and the government, it faced substantial resistance from landowners, backed by a powerful lobby. Additionally, the Ministry of Justice raised concerns regarding restrictions on landowners' rights stemming from earlier oil contracts, further complicating reform efforts. Despite the Ministry of Industry and Trade's commitment to reform, by the late 1920s, landowners had successfully stalled any significant change. Although minor adjustments to mining law were implemented in the 1930s, including the reduction of fees for the use of oil-bearing lands, landowners retained the right of first refusal over crude oil deposits.
In addition to privately-owned lands, many oil-bearing territories were state-owned. Prior to World War I, these state-owned lands were largely underutilized due to the sufficient supply of crude oil from private lands during the Austrian era. However, as the major Boryslav oil field faced depletion after the war, state-owned oil lands garnered increased attention. Proposals to sell these lands were raised as a potential solution to improve the national currency. However, these initiatives were met with opposition from Polish oil entrepreneurs, who recognized the potential profitability of state-owned lands and their potential contribution to the national economy if managed effectively.
Several obstacles impeded the exploitation of state-owned oil lands. Foremost among these was the lack of detailed maps of state-owned oil-bearing lands, a consequence of military secrecy during the Austrian period. Furthermore, the conditions imposed by the state on the use of these lands were no more favorable to industrialists than those applied to private lands, as the state continued to enforce the “norm of accession”. As a result, oil companies were reluctant to invest in the development of unexplored state-owned lands, leaving the state to gradually take on this responsibility as resources permitted.
Keywords: oil industry, oil law, land tenure, Eastern Galicia, interwar Poland.