PGNiG & LOTOS Combine to Speed Up Exploration in Poland
Polish oil and gas explorers and producers PGNiG and LOTOS have teamed up in a bid to speed up hydrocarbon exploration in Poland and increase domestic output.
The companies announced the agreement in a joint statement yesterday. Under a cooperation agreement, the pair will examine seven of PGNiG's exploration licences in Pomorskie (Pomerania), Zachodniopomorskie (Western Pomerania), Warmia i Mazury (Masuria) and the Lubelskie regions, with a view to jointly explore the assets. PGNiG will retain the right to act as operator on the licences but LOTOS will have the option to acquire shares in each of the licences.
"It's a very good day for Poland" – commented the Treasury Minister Mikolaj Budzanowski, who has been pressing state-linked companies to work together in shale gas exploration for almost a year.
The deal is another step in the direction of the integration amongst state-controlled oil and gas companies and utilities around the exploration of shale gas. Last June, five firms including PGNiG, three utility companies and copper miner KGHM, agreed to spend over 1.7 bln zlotys in the Wejherowo concession.
A working team is now being set up to plan the technical, economic and legal details of the agreement, according to the statement. A joint exploration programme will also be developed in an effort to expand upstream operations.
Market and energy security is a key motivator in the cooperation agreement, President of PGNiG Grażyna Piotrowska-Oliwa said yesterday.
"The promise of increased supply of price competitive natural gas is an important incentive for LOTOS, one of our key customers, to engage in exploration projects," she said. "It is the business ventures where the synergies and sources of motivation of both partners are clear that have the best chance for success and raise hopes for increased exploration for hydrocarbons at home. They should result in increased production from domestic deposits."
"The agreement we signed today is of material importance to the national energy security," CEO of LOTOS Paweł Olechnowicz said. "We expect that the joint effort with help increase the volumes of both oil and gas produced in Poland and, consequently, further diversify the sources of supply for domestic customers."
The statement also says that the cooperation will not limit itself to just the seven exploration licences named in the agreement but will see the two companies work together to secure further licence opportunities in the future. Pawel Olechnowicz and Grazyna Piotrowska Oliwa commented that the companies can apply for new upstream licenses in Norway.
At the beginning of this year unofficial sources suggested that the Polish government had considered an acquisition of Grupa Lotos by PGNiG.