Lotos is looking to reduce the use of expensive natural gas in production. It has already implemented measures to reduce gas use by 50 per cent quarter-on-quarter. The company is also pinning its hopes on the B4 and B6 deposits in the Baltic Sea, Lotos Group said on Wednesday.
Lotos Group Vice President for Mergers and Acquisitions Krzysztof Nowicki informed on Wednesday about the most important events for the company in the first quarter of 2022.
– Lotos Group on 16 April completed a partial maintenance shutdown of its refinery installations. This event took place at a special time, after the beginning of Russia’s aggression in Ukraine. The undertakings were carried out smoothly, according to the projected budget and on schedule – informed Krzysztof Nowicki, Vice-President for Mergers and Acquisitions of Lotos Group.
The Lotos vice-president added that the merger process with PKN Orlen is underway. “We are at the stage of preparation, in accordance with Polish law, for the integration processes,” Nowicki, the vice-president, pointed out.
– ‘We are also in the process of determining with the social side the conditions under which the process of creating a multienergy concern will take place. We have signed a certain agreement, which in principle brings us closer to a common perception of reality, on which conditions this multienergy concern will be created. This process is taking place within the framework of widely understood social peace – Nowicki stressed.
According to the company’s data, the Lotos refinery processed 1.95 million tonnes of crude oil in Q1 2022. Nowicki noted that after the completion of the overhaul process, Lotos Group carries out purchases of the necessary raw materials for its operations in an uninterrupted manner.
– Any purchases that are made are based on long-term contracts in force, while spot purchases are made within the scope of the diversification of raw material supply sources that we anticipated and communicated earlier. Since mid-2021, Lotos Group has worked to optimise the use of another energy resource for its production. I am talking here about gas. At the moment, we have carried out and implemented measures that allow us to reduce the use of natural gas in our production activities by over 50 percent in relation to the consumption of this raw material in the first quarter of 2021. – informed Krzysztof Nowicki.
– For the past three or four quarters, we have been focused on what is happening with natural gas quotations. We have seen large supply disruptions, demand seems to be still unchanged. In Q1 2022, average quotes were $173.53/boe compared to $38.21/boe in Q1 2021. We have been looking for methods to minimise gas consumption and replace it with other raw materials, which are semi-finished products in Lotos Group – said chief financial officer Łukasz Minuth.
– In our Baltic Sea region, we have a project in the analysis phase – gas field B4, B6. It could be a kind of diversification of our demand for gas, especially in such a volatile macroeconomic environment – added Przemysław Krysicki, investor relations director.
In Q1 of this year. Lotos extracted about 1 million boe of hydrocarbons from Norwegian fields and 0.5 million boe from Polish fields.
Investor relations director Przemyslaw Krysicki said that daily hydrocarbon production decreased by 9% between Q1 2021 and Q1 2022. The company said that in Q1 2022, the average daily oil and gas production was 16.9 thousand boe.
It explained that this was due to production restrictions at some of Lotus’ fields.