Exploration and Production
The PGNiG Group companies are engaged in gas and oil exploration and production projects both in Poland and abroad – in Africa, Asia and Europe. As a result of our exploration work as well as geophysical and seismic surveys we are now able to classify increasingly larger quantities of petroleum as reserves. Although in 2011 we produced gas and oil in Poland only, in 2012 the PGNiG Group expects to launch production from the fields in Norway and Pakistan.
Key Events in 2011
- Successful completion of hydraulic fracturing in the Lubocino-1 well;
- Increase in natural gas production by 100 m m³ year on year;
- For the first time ever, PGNiG will perform a responsible function of an operator on its Norwegian Continental Shelf licence
The PGNiG Group’s activities in the Exploration & Production segment include geophysical and geological surveys, as well as well drillings and production of natural gas and crude oil. At present, the Group produces natural gas and crude oil only from Polish fields. Foreign production is scheduled to be launched in 2012, within licence areas on the Norwegian Continental Shelf and in Pakistan. For its needs, the segment uses the capacities of the gas storage facilities in Bonikowo, Brzeźnica, Daszewo, Strachocina and Swarzów.
Financial Performance
The Exploration & Production segment derives its revenue mainly from non-regulated sales of natural gas and crude oil, but also from geological, geophysical, drilling and maintenance services.
In 2011, the segment’s operating profit was PLN 1.1 bn, up by PLN 0.5 bn year on year. The PGNiG Group recorded improved profitability of crude sales, attributable to a 40% increase in crude prices on global markets. Operating profit of the segment advanced also on higher revenue from sales of geophysical, geological, drilling and maintenance services, which in 2011 reached the record high of PLN 1 bn, on the back of intensified exploration for unconventional gas in Poland. PGNiG also recorded a 4% rise in production of nitrogen-rich gas and a 7% increase in output of the denitriding plants.
Geological, Geophysical, Drilling and Maintenance Services
Exploration for natural gas and crude oil is carried out both in Poland and abroad. Exploration work consists in analyses of historical and geological data, seismic profiles and drilling:
- Drilling services – drilling work is performed by PGNiG, as well as PNiG Jasło, PNiG Kraków and PNiG Nafta;
- Geological services – seismic acquisition, processing and interpretation of seismic data and well logging are performed by Geofizyka Kraków and Geofizyka Toruń;
- Maintenance services – specialist services supporting the performance of exploration and production work are provided by Poszukiwania Naftowe Diament and Zakład Robót Górniczych Krosno.
As at the end of 2011, PGNiG held 95 licences for gas and oil exploration and appraisal, covering a total area of 62 thousand km², 225 licences for gas and oil production in Poland, nine licences for underground storage of gas, as well as three licences for storage of waste and one licence for appraisal of rock salt. During 2011, the Ministry of Environment awarded PGNiG seven further licences for exploration and prospecting for hydrocarbons, and six production licences. One exploration and prospecting licence and three production licences were extinguished. Currently, the Group’s operations are focused in three regions: the Carpathians, the Carpathian Foreland and the Polish Lowlands. In these regions, work was carried out on 28 boreholes. Out of 23 wells with known test results, 11 were classified as positive (including nine gas wells and two oil and gas wells), whereas the remaining 12 wells were dry.
In 2011, geophysical work was carried out under PGNiG’s licences located in the Carpathian Mountains, Carpathian Foothills and the Polish Lowlands, as part of which 973 kilometres of 2D seismic lines and 843 km² of 3D seismic profiles were acquired.
