Grupa LOTOS S.A. - Integrated Annual Report 2012
In 2012, we entered into two material agreements that will support implementation of our strategy in the area of crude oil exploration and production in the near future.
Cooperation with PGNiG
In September 2012, we initiated cooperation with PGNiG in the area of exploration for and production of crude oil and natural gas from conventional and unconventional deposits, as well as trading activities. The agreement's objective is intensification of exploration work in Poland. After analysis of the production potential of seven of PGNiG's licenses, four of the licence areas, situated in the Gdańsk and Szczecin Provinces, were identified for further exploration. The next phase of our work together will involve development of an action plan for the selected licences and assessment of the projects' economic viability. The action plan will define the extent of necessary seismic surveys and exploration and production drilling to be made with a view to discovering and proving the reserves, and pursuing joint development of the conventional and unconventional hydrocarbon fields.
Agreement with CalEnergy Resources
In October 2012, LOTOS Petrobaltic and CalEnergy Resources Poland entered into a joint operation agreement with respect to the B4 and B6 gas fields. Their projects will be executed through a special purpose vehicle, to which a license will be contributed. LOTOS Petrobaltic and CalEnergy Resources will share profits and costs in the SPV on a 51:49 basis (51% for LOTOS Petrobaltic and 49% for CalEnergy Resources). Under the preparatory work schedule, acquisition of seismics and selection of a preliminary field development concept are scheduled for 2013–2014. Upon completion, the partners will be able to make a final investment decision concerning development of the fields. The project will also enable LOTOS Petrobaltic to pursue exploration and development work on other resources, which may potentially be combined with the B4 and B6 fields.
Plans for 2013 provide for the following exploration and production operations:
- Continued development of the B8 crude oil field: drilling of two production wells, financing arrangement process, preparation of technical designs and execution of contracts,
- Ensuring the safety of further oil production from the B3 field: repair of the PG-1 unmanned drilling rig and re-start of production from the PG-1 node,
- Preparation of the B4 and B6 gas fields for their development in cooperation with CalEnergy Resources: seismics acquisition work on the Gaz Południe and Gaz Północ licences, which cover the B4 and B6 gas fields, in order to modify and refine the field development concept,
- Development of the B28S site: drilling of an exploratory well to prove the presence of hydrocarbons and, if the well is drilled with positive results, commencement of the site's development,
- Continued exploration work to identify structures with the potential for discovery of hydrocarbons in other licence areas.
- Cooperation with PGNiG on exploration and production of conventional and unconventional natural gas and crude oil.
- Securing the LOTOS Group's strategic interests in the YME project and taking steps to recover the capital invested in the project,
- Efforts aimed at acquiring a producing field as part of the strategy for increasing oil production, which provides the optimal scenario for recovering funds tied up in the Yme project.
- Increasing and maintaining crude oil production at approximately 100,000 tonnes a year,
- Continuation of drilling projects (drilling of five new production wells) and continuation of exploration work, also for unconventional resources.