Orlen Group integrates mining assets in Norway

Platform at the Yme field in Norway

At the beginning of May, PGNiG Upstream Norway (PUN) acquired the production assets of Lotos Exploration and Production Norge (LEPN), Orlen Group’s second Norwegian company.

Regarding hydrocarbon resources and production, the consolidated entity is among the top ten companies operating on the Norwegian Continental Shelf, accounting for half of the group’s output. Integrating exploration and production activities will facilitate investments, increasing hydrocarbon production and strengthening Orlen Group’s position on the Norwegian market, which is important for Poland’s energy security.

“The consolidation of Orlen Group’s Norwegian assets will allow us to better utilise the exploration potential of our concessions and to more effectively engage the capital and financial resources previously generated by separate entities. These synergies, supported by the knowledge and experience of our employees, will contribute to increasing the scale of Orlen’s operations on the Norwegian Continental Shelf. Already, thanks to consolidation, we are among the most important mining companies in this market. In a few years, as a result of further investments, we will be able to significantly increase the amount of gas extracted in Norway, which will contribute to strengthening the country’s raw material security,” – says Daniel Obajtek, CEO of PKN Orlen.

The integration of the Norwegian assets is a consequence of the merger of PKN Orlen with Lotos Group and PGNiG completed last year. As a result, the Orlen Group included two companies operating the same business in the same market. The decision to integrate them was aimed at achieving operational and financial synergies and adapting the business to the legal requirements in Norway.

The consolidated entity has a strong position in the market with the largest oil & gas players. PUN’s total oil and gas reserves currently stand at 346.6 million barrels of oil equivalent. Production is 88.1 thousand barrels per day, which in both categories places the company in the top 10 of all companies operating on the Shelf.

PUN’s position is even better if only natural gas is considered. In this respect, the company ranks 8th in Norway regarding reserves and production. Last year, Orlen Group’s total natural gas production on the Norwegian Continental Shelf reached approximately 3.5 billion cubic metres (bcm). After the merger, PUN has interests in 98 concessions – only four operators on the Norwegian Shelf have a larger holding.

The large portfolio of concessions is part of Orlen Group’s strategic plans. The company wants to increase natural gas production volume to 12 bcm per year by the end of 2030, i.e. by approximately 50 per cent over current production. Investments on the Shelf will be crucial to achieving this goal, as Orlen Group’s production volume in Norway is expected to reach around six bcm in 2030. This will mean an increase in Orlen’s own gas production on the Shelf by around three quarters compared to last year’s combined PUN and LEPN production.

All the raw material produced by Orlen Group on the Norwegian Continental Shelf will be able to be delivered to Poland via the Baltic Pipe gas pipeline. PUN plans to invest around USD 3 billion over the next five years to ensure a dynamic increase in production. Regarding planned capital expenditure, Orlen is among the top companies operating on the Shelf.

The most important projects currently underway are developing the Tommeliten Alpha, Fenris, Yggdrasil, ├śrn and Alve Nord fields.

PUN was chosen as the integrator of Orlen Group’s Norwegian assets because of its experience in successfully implementing its production development strategy, as evidenced by the company’s rapid growth in gas volumes – from 0.5 bcm in 2020 to 1.4 bcm in 2021 to 3.1 bcm last year. PUN is also in the process of acquiring and consolidating the assets of INEOS Exploitation and Production Norge, which will be completed in 2021.

Currently, Orlen Group has production in 17 fields on the Norwegian Continental Shelf.

Source: PortalMorski.pl

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