Activity of PGNiG in the area of the Norwegian Continental Shelf

PGNiG Upstream Norway holds interests in 18 exploration and production licenses on the Norwegian Continental Shelf, located in the Norwegian Sea, North Sea, and Barents Sea. Together with its partners, it is involved in the production of hydrocarbons from the Skarv, Morvin, Vilje and Vale and Gina Krog fields, as well as the development of the Snadd and Storklakken fields. Within the remaining licenses, the Company carries out exploration projects.

The main asset of PGNiG Upstream Norway is the Skarv field, developed using a floating FPSO production unit. The unit is owned by the license holders, including PGNiG UN. Skarv is expected to continue its operation for at least the next 20 years. The Morvin, Vilje, and Vale fields comprise a set of wells that have been tied back to existing production infrastructure. In 2016, the company produced 555 thousand tonnes of crude oil and 517 million cubic meters of natural gas from the four fields.

In June 2017, the company started production of oil and gas from the Gina Krog Field. It is a large field with initial reserves of 218 million barrels of oil equivalents. and with a significant exploration upside.

In 2015 and 2016, PGNiG Upstream Norway continued to develop the Gina Krog and Snadd Fields. On Gina Krog the purpose-designed Maersk drilling rig started pre-drilling of production wells in 2015. Simultaneously, the construction of the jacket structure for the platform started in Holland, while the topside and living quarters fabrication began in South Korea and Norway repectively, making the Gina Krog development truly a very global project. In parallel, marine activity, such as laying of intra-field pipelines and other subsea structures were ongoing on the Gina Krog field location in the North Sea.

Moreover, in 2016, the Skarv partners selected the development concept for the Snadd Field. The investment plan assumes that three new production wells will be drilled in 2019 and 2020 and production will commence in the fourth quarter of 2020. PGNiG Upstream Norway, together with its partners, also continued works on the remaining exploration licenses.

In 2016, PGNiG Upstream Norway was awarded interests in 5 new exploration licenses on the Norwegian Continental Shelf, and in early 2017, the Norwegian Ministry of Petroleum and Energy awarded PGNiG another 2 licenses in the so-called numbered license round. One of the licenses was awarded to PGNiG Upstream Norway as an operator. Over the next years the company, together with its partners, will conduct geological and geophysical analyses with the aim to identify prospects with prospective resources high enough to justify exploration drilling. After this period, PGNiG and its partners will either decide to drill one or more exploration wells to test the structures or to relinquish the license without drilling.

The new licences are characterised by a gas potential, which is directly connected with PGNiG SA’s plans for gas imports from Norway to Poland (the Baltic Pipe project). Both licenses are located close to existing production infrastructure and pipelines, which can greatly facilitate and accelerate the investment process. PGNiG’s crude oil production in Norway is sold directly from the fields to Shell International Trading and Shipping Company Ltd (Skarv, Vilje, and Vale fields) and TOTSA Total Oil Trading SA (Morvin field).

Natural gas is also produced in all fields, (except the Vilje field) , and this gas is routed via the existing offshore transmission network. PGNiG’s gas is mainly exported to Germany, where it is received by PGNiG Supply & Trading GmbH. The main sales markets for PGNiG UN are Norway, Germany, and the United Kingdom.