PKN Orlen wants to double the amount of gas it receives through the Baltic Pipe gas pipeline, which is used to transmit the natural gas extracted by the company in Norway. By 2030, Orlen intends to extract 6 billion cubic meters per year from the Norwegian shelf alone, which is an increase of three quarters compared to last year’s production.
„The consolidation of the Norwegian assets of the Orlen Group will allow us to better exploit the exploration potential of our concessions and more effectively engage the capital and funds so far generated by separate businesses. 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. Thanks to consolidation, we are already among the most important mining companies in this market. Within a few years, as a result of further investments, we will be able to significantly increase the amount of gas produced in Norway, which will contribute to strengthening the country’s raw material security,” said Daniel Obajtek, President of PKN Orlen.
The integration of the Norwegian assets of PUN and LEPN is a consequence of the merger of PKN Orlen with Grupa Lotos and PGNiG last year. As a result, the Orlen group now includes two companies doing the same business on the same market. The decision to integrate them was aimed at achieving operational and financial synergies and at aligning activities with the legal requirements in force in Norway.
The consolidated entity has a strong position in the market, where the largest players in the oil&gas industry operate. The total oil and gas resources currently available to PUN reach 346.6 million barrels of oil equivalent, and production is at 88.1 thousand barrels per day, which in both categories gives the company a place in the top ten of all companies operating on the shelf. PUN’s position is even better if one considers only natural gas. In this regard, both in terms of reserves and production, the company occupies the 8th position in Norway. Last year, the Orlen Group’s total natural gas production on the Norwegian Continental Shelf reached approx. 3.5 billion cubic meters.
After the merger, PUN has shares in 98 concessions – only four entities operating on the Norwegian shelf have a larger holding. The large portfolio of concessions fits into the strategic plans of the Orlen Group, which wants to increase the volume of natural gas production to 12 billion cubic meters by the end of 2030, which is by about 50% of current production every year. Investments on the shelf will be essential for achieving this goal, as in 2030 the Orlen Group’s output in Norway is expected to reach approx. 6 billion cubic meters. This will mean an increase in its own gas production on the shelf by approx. three-quarters compared to last year’s combined PUN and LEPN extraction. All natural gas produced by the Orlen Group on the Norwegian Continental Shelf will be delivered to Poland via the Baltic Pipe.
In order to ensure the dynamic growth of extraction, over the next five years PUN plans to invest approx. USD 3 billion. In terms of planned investment expenditures, Orlen is at the forefront of companies operating on the shelf. The most important projects currently being implemented are the development of the Tommeliten Alpha, Fenris, Yggdrasil, Ørn and Alve Nord deposits.
PUN was chosen as an integrator of Orlen Group’s Norwegian assets due to its experience in the effective implementation of the extraction development strategy, as evidenced by the dynamic growth of gas volumes produced by the company – from 0.5 billion cubic meters in 2020, through 1.4 billion cubic meters in 2021, to 3.1 billion cubic meters last year. PUN has also completed the acquisition and consolidation of the Ineos Exploartion and Production Norge assets in 2021.
Currently, the Orlen Group operates in 17 deposits on the Norwegian Continental Shelf. It is planning to obtain further concessions for the extraction of gas on the Norwegian Shelf. Mining in this area not only increases Poland’s energy security, but also gives the countries of Central and Eastern Europe a chance to become independent of hydrocarbon supplies from behind the Ural mountains.
PKN Orlen / Bartosz Siemieniuk