Polish gas firm PGNiG cleared to purchase stake in two fields in North Sea

Leszek Szymański/PAP

The state-controlled Polish Oil and Gas Company (PGNiG) has been given the green light by the Norwegian Petroleum Directorate to acquire stakes in two gas producing fields in the North Sea, the firm said on Tuesday.

Upon completion of the deal, PGNiG Upstream Norway, the company’s Norwegian subsidiary, will receive a 6.45-percent stake in the Kvitebjorn field and a 3.225-percent stake in the Valemon field. The Polish company also plans to purchase a stake in the infrastructure which is used to transport hydrocarbons produced from the fields.

The Polish company bought shares in four licences in the fields in September 2020 from Norske Shell.

Pawel Majewski, PGNiG’s CEO, said that the recently approved acquisitions will immediately translate into a significant increase in the company's gas output from its Norwegian assets.

"We forecast that in 2021 the production of PGNiG Upstream Norway will reach 0.9 billion cubic meters of gas, which will mean almost a twofold increase compared to the production level in 2020," Majewski said.

The transaction could increase PGNiG Upstream Norway's average daily hydrocarbon production by about 30 percent.

The company estimates that in the years 2023-28, after the launch of the Baltic Pipe gas pipeline, both newly acquired fields will allow an annual average of about 0.2 billion cubic metres of gas to be shipped to Poland.

The acquisition of the two new fields will give PGNiG Upstream Norway a total of 32 licences on the Norwegian Continental Shelf.