05.01.2021 PGNiG’s new acquisitions of upstream assets in Norway formally approved

  • Jan 06, 2021
  • PGNiG

The interests in four licences covering the producing fields Kvitebjørn and Valemon were acquired by PGNiG Upstream Norway, a wholly-owned subsidiary of PGNiG SA, in September 2020 under an agreement with Norske Shell. Both newly acquired fields contain predominantly natural gas.

“We are beginning 2021 on a high note. Thanks to our experience and capabilities, we have been able to develop our operations on the Norwegian Continental Shelf despite the pandemic-related headwinds. As the approved acquisitions involve already producing fields, they will immediately translate into a significant rise of our gas output from Norwegian assets. We expect that in 2021 the volume of gas produced by PGNiG Upstream Norway will reach 0.9 bcm, almost double the level recorded in 2020,” said Paweł Majewski, President of the PGNiG Management Board.

PGNiG Upstream Norway estimates that the acquisitions will bring about a step increase in its average daily production of hydrocarbons (both oil and gas) of about 30%. The company’s gas production volume is forecast to reach 0.9 bcm in 2021, compared with approximately 0.5 bcm in 2020. According to estimates, in 2023–2028 (i.e. after the launch of the Baltic Pipe, which will link the Norwegian Continental Shelf with Poland via Denmark), the two fields will deliver approximately 0.2 bcm of gas annually to PGNiG Upstream Norway.

As regards the Kvitebjørn field, PGNiG Upstream Norway acquired a 6.45% interest, becoming a licence partner to Equinor (the operator), Petoro, Spirit Energy Norway and Total E&P Norge. The remaining recoverable reserves of the field, put on production back in 2004, have been estimated at approximately 184.3 mmboe.

In the case of the Valemon field, the interest acquired by PGNiG Upstream Norway is 3.225%. Producing since 2015, the field still contains approximately 29 mmboe of recoverable reserves. The licence is operated by Equinor, and the licence partners are PGNiG Upstream Norway and Petoro.

In addition, PGNiG Upstream Norway purchased a stake in the infrastructure used to transport hydrocarbons produced from these fields.

PGNiG Upstream Norway is already producing crude oil and natural gas from nine fields: Skarv, Morvin, Vale, Vilje, Gina Krog, Skogul and Ærfugl, Kvitebjørn and Valemon, while development and assessment work is under way on five more deposits: Duva, Tommeliten Alpha, King Lear, Ærfugl Outer and Shrek. The rapid pace of acquisitions made on the Norwegian Continental Shelf over the past four years has increased the PGNiG Group’s oil and gas reserves from approximately 80 to 208 mmboe.