Poland banks on Norwegian offshore gas and oil field

A platform at the Gina Krog oil and gas field. [@WorldOil/Twitter]

Poland, a country seeking to decrease its dependence on Russian gas, yesterday (3 July) said the start of production of gas and crude oil from an offshore field near Norway, in which the Polish company PGNiG has a stake, was “very good news”.

At 17.02 CET on 30 June, Norway’s Statoil announced the start of production on the Gina Krog oil and gas field in the North Sea.

Norwegian energy company Statoil and its partners have invested a total of some NOK 31 billion (€3.2bn) in the development of the Gina Krog field. More than 600 people have been working on the site since last August, preparing the platform for production.

Discovered in 1974, Gina Krog was initially considered a small gas accumulation. It was only in 2007 that it also turned out to be rich in large quantities of crude oil. PGNiG Upstream Norway acquired an 8% share in the field in 2014. The licence operator is Statoil Petroleum AS, with a 58.7% interest. The other consortium members are: Total E&P Norge AS (15%), KUFPEC Norway AS (15%) and Aker BP ASA (3.3%).

“We are proud to have delivered Gina Krog with a good HSE record and in line with the cost estimate in the plan for development and operation,” says Margareth Øvrum, Statoil’s executive vice president for Technology, Projects and Drilling, thanking suppliers and partners for their good collaboration in the project.

PGNiG hailed the launch of production from Gina Krog as “very good news” not only for the company, but for the entire Polish gas industry.

Piotr Woźniak, President of the Management Board of PGNiG S.A., said that the company assumes that starting from 2022 it will be able to supply approximately 2.5bn cubic metres (bcm) gas produced to Poland, through a new gas link.

The annual consumption of natural gas in Poland, according to the CIA World Factbook, reached 14 bcm in 2011.

By 2022 the Norwegian, Danish and Polish transmission system operators will construct a gas pipeline system to secure direct gas imports from Norway to Poland.

PGNiG said that the group’s strategy for 2017–2022 is to expand its upstream business outside of Poland. Currently, PGNiG is involved in 18 licences on the Norwegian Continental Shelf. The Group holds interests in five crude oil and gas fields (Skarv, Vilje, Morvin, Vale and Gina Krog.

The Group’s exploration work is being carried out under nine licences; on two of the licences PGNiG acts as the operator. The Company is planning to take part in upcoming licensing rounds.

To diversify from Russian gas exports, Poland had, in the recent past, placed its hopes in the development of shale gas. This attracted global energy majors, including Chevron, ExxonMobil and Total, but one by one they pulled back after disappointing results and a slump in oil prices.