Grupa LOTOS is engaged in exploration and production in Poland, Lithuania, and Norway through its subsidiary, LOTOS Petrobaltic S.A. 

LOTOS Petrobaltic is directly responsible for operating activities at home. In Lithuania, it conducts operations through AB LOTOS Geonafta of Gargždai and its subsidiaries, while Norwegian operations are carried out by LOTOS Exploration and Production Norge AS of Stavanger. The LOTOS Petrobaltic Group includes also two companies conducting support activities: Grupa Miliana and Energobaltic Sp z o.o. 

Grupa Miliana renders sea transport services, using six company-owned vessels: a tanker, two surveillance ships, two tugboats and a research vessel. Additionally, Grupa Miliana charters third-party vessels, such as tankers and tug/supply vessels.

Energobaltic was established to manage associated gas generated in the process of oil production from fields located in the Baltic Sea. The company, which has its registered office in Władysławowo, is involved in the production of electricity, heat, LPG and natural gas condensate, using waste gas from an offshore oil production facility (the B3 field).

As at December 31st 2012, crude oil reserves and resources held by the LOTOS Petrobaltic Group amounted to 6.95 million tonnes, or 53.2m bbl (reserves classified as 2P), and 1.39 million tonnes or 10.6m bbl (resources classified as 2C), whereas its natural gas reserves and resources were 0.48 billion cubic metres (2P) and 6.46 billion cubic metres (2C).

Upstream business in Poland – Baltic Sea

LOTOS Petrobaltic holds seven licences for exploration and appraisal of mineral deposits in the Polish economic zone of the Baltic Sea. These are the Gotlandia, Łeba, Rozewie, Gaz Północ, Gaz Południe, Sambia E and Sambia W exploration licences, covering a total area of more than 7,000 km2. Two applications for exploration licences for the Słupsk E and Słupsk W areas are currently awaiting decisions from the Ministry of Environment.

LOTOS Petrobaltic holds four hydrocarbon production licences:

• For the B3 field: a field of crude oil and associated natural gas located around 73 km north of Cape Rozewie; in production since 1992. An option to extend the period of oil production beyond 2016 is currently being analysed.
• For the B8 field: crude oil and associated natural gas, located around 70 km north of Jastarnia (B8). The B8 licence is valid until 2031. The field is currently being developed.
• For the B4 and B6 natural gas fields: valid until 2032. Preparations are underway for development of the fields in partnership with CalEnergy Resources Poland, as part of a cooperation agreement signed in 2012.

As at December 31st 2012, LOTOS Petrobaltic's crude oil reserves and resources in the Baltic Sea amounted to 4.17 million tonnes, or 32.3m bbl (reserves classified as 2P) and 1.35 million tonnes or 10.4m bbl (resources classified as 2C), whereas its natural gas reserves and resources were 0.48 billion cubic metres (2P) and 6.46 billion cubic metres (2C).

In the Baltic Sea in 2012, LOTOS Petrobaltic produced from the B3 field and, as part of production tests, from the B8 field. In the reporting period, total production from the fields in the Baltic Sea reached 187,700 tonnes of crude oil and 20.9 million Nm3 of natural gas.

Upstream business in Lithuania

In Lithuania, LOTOS Petrobaltic operates through its wholly-owned subsidiary, AB LOTOS Geonafta. The AB LOTOS Geonafta Group comprises UAB Genciu Nafta, UAB Manifoldas and UAB Minijos Nafta.

The AB LOTOS Geonafta Group's core business consists in the exploration for and production of crude oil, and the provision of drilling services in Lithuania. The company is also engaged in crude oil trading. The AB LOTOS Geonafta Group produces from 15 oil fields.

As at December 31st 2012, crude oil reserves classified as 2P held by the AB LOTOS Geonafta Group amounted to 1.1 million tonnes (8.1 mn bbl).

The AB LOTOS Geonafta Group's crude oil production totalled 74,600 tonnes in 2012. The Lithuanian companies aim to achieve a total annual crude oil output of approximately 100,000 tonnes in 2015.

Upstream business in Norway – Norwegian Continental Shelf

LOTOS Exploration & Production Norge (LOTOS Norge) is the subsidiary responsible for the development of operations on the Norwegian Continental Shelf. LOTOS Norge presently has interests in seven licences for exploration for and production of crude oil: (PL 643, PL 503/503B, PL 498, PL 497/497B, PL 655, PL 455, PL 316/316B), acting as the operator for three of them (PL 503/503B, PL 498 and PL 455).

LOTOS Norge's assets include a 20% interest in licence PL 316/316B, under which the YME field is being developed by a consortium which includes Talisman Energy, a Canadian company, as the operator. A number of problems have been encountered in the course of the development process that have prevented the start of production from the Yme field. In 2012, after identification of cracks in the supports of the platform legs and due to the failure by SBM, the platform’s owner and supplier, to provide relevant safety certificates, the operator evacuated the platform's staff and suspended work. Currently, Grupa LOTOS activities in the YME project are focused on securing the Company's strategic interests and recovering the capital invested so far in the project.

In the area covered by the remaining six licences, exploration work is in progress to evaluate their potential and identify any in-place resources. LOTOS Norge also participated in the APA licensing rounds organised by the Norwegian Ministry of Petroleum and Energy.

As at December 31st 2012, crude oil reserves classified as 2P held by LOTOS Norge amounted to 1.73 million tonnes (12.9 mln bbl). Due to the delays in the execution of the YME project, there has been no production from the Norwegian Continental Shelf as yet.