PGNiG and LOTOS to work together in projects on the Norwegian Continental Shelf

Warsaw, Poland, 14-5-2014 — /EuropaWire/ — PGNiG Upstream International and LOTOS Exploration & Production Norge have signed a letter of intent for collaboration in projects on the Norwegian Continental Shelf. The companies are to work together in the review and pursuit of potential acquisitions, and will participate together in licensing rounds held by the Norwegian Ministry of Petroleum and Energy.

“Our joint exploration projects with LOTOS will be an example of business collaboration geared towards greater operating efficiency. We hope that the relationship will be mutually beneficial, allowing both companies to gain a further foothold on the Norwegian Continental Shelf,” commented Mariusz Zawisza, President of the PGNiG Management Board.

“We already work with Polskie Górnictwo Naftowe i Gazownictwo on two onshore licences in Poland,” said Paweł Olechnowicz, President of Grupa LOTOS S.A., adding, “The time has now come for Norway, where both companies have been active for seven years and have an extensive portfolio of licences at their disposal. The ultimate aim of our strategic partnership is the security of Poland’s energy supplies.”

The companies have agreed to appoint representatives who will meet regularly to identify and discuss further potential for collaboration between LOTOS Norge and PGNiG Upstream International.

PGNiG SA currently holds 14 licences on the Norwegian Continental Shelf through its subsidiary, PGNiG Upstream International, and operates two of them. In addition, in 2012, PGNiG launched its first foreign hydrocarbon production project under the Skarv licence, in which the company has an 11.9% interest. In 2013, PGNiG’s Norwegian production amounted to approximately 300 thousand tonnes of crude oil (some 2.2 million barrels) and about 350 million cubic metres of natural gas.

Last year, LOTOS Norge acquired interests in 14 licences on the Norwegian Continental Shelf. The investment has allowed LOTOS to double its hydrocarbon production to more than 10 thousand barrels a day. In the coming two years, LOTOS intends to pursue further acquisitions which, in combination with the planned Baltic Sea B8 field development, will bring the company closer to its strategic production target of 24 thousand barrels per day.

Polskie Górnictwo Naftowe i Gazownictwo SA is the leader in the Polish natural gas market and the only vertically-integrated gas company in Poland. PGNiG Group companies operate in a number of areas, such as domestic gas and oil production, gas and oil field development in Poland and abroad, geophysical, geological and exploration services in Poland and abroad, gas import to Poland, underground storage of gas, and gas fuel distribution.

Through its subsidiaries (LOTOS Petrobaltic, LOTOS Norge and LOTOS Geonafta), LOTOS operates on the Baltic, North and Norwegian seas, as well as in Lithuania, where the company is engaged in oil and gas exploration and production from offshore and onshore deposits. LOTOS is the second largest hydrocarbon producer in Poland and the only Polish company to produce oil and gas from Baltic Sea deposits. It is also the largest crude oil producer in Lithuania. In line with its strategy until 2015, LOTOS aims to produce 1.2 million tonnes of crude oil annually.

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