See also:
Upstream

2015 marked the 10th anniversary of PKN ORLEN Management Board’s decision to approve the strategy providing for the formation of an exploration and production segment.

Currently, ORLEN Upstream operates in eight Polish provinces and is a recognised operator in Canada.

Operations in Poland

2015 brought about major reshuffles on ORLEN Upstream’s asset map. These were related to the acquisition of new licences as well as abandoning less promising ones.

In 2015, ORLEN Upstream acquired two licences from Deutsche Erdoel AG and negotiated entry into a joint operations agreement with PGNiG S.A. concerning eight licence areas in the Karpaty region (Bieszczady project). In October 2015, following a tender procedure, the company acquired the Siennów-Rokietnica licence (covering an area situated in the Rzeszów Province) from the Ministry of the Environment. On December 31st 2015, it also closed a transaction to buy a 100% stake in FX Energy Inc., thus adding an interest in seven producing fields to its portfolio of its Polish assets.

Currently, gas is produced in cooperation with PGNiG S.A. (FX Energy’s share is 49%). As at the end of 2015, the 2P reserves held by the ORLEN Group in Poland amounted to 8.2MMBOE. The potential offered by the newly acquired assets includes, apart from the production, exploration licenses.

ORLEN Upstream at the end of 2015 conducted operations, independently or with a partner, in 29 license areas situated in 8 provinces. The company has a 100% interest in 14 licences, a 51% interest in 1 licence, and a 49% interest in 14 licences.

Operations in Canada

In Canada, the ORLEN Group conducts production operations in the Alberta province, using horizontal drilling and hydraulic fracturing technologies. In 2015, 16 such operations were performed, with the average production rate in Q4 2015 at over 7.3 MBOE/day, including 45% of liquid hydrocarbons (crude oil and condensate).

In December 2015, through the subsidiary ORLEN Upstream Canada, the ORLEN Group acquired production assets located in the region of Kakwa in Alberta from Kicking Horse Energy. The acquisition increased the Group’s 2P hydrocarbon reserves and production in Canada. As at the end of 2015, production from the assets in the Kakwa region stood at over 4.5 MBOE/d.

The acquisition on the stable Canadian market is aligned with the risk profile set out in PKN ORLEN’s strategy. Good deposit parameters of the new assets and growing operations in a well-surveyed area mitigate the operational risks associated with the investment. Furthermore, given the effectiveness of the applied horizontal drilling and multi-stage fracturing techniques, there is an opportunity for experience sharing between the Polish and Canadian teams and for achieving synergies. The Canadian market also offers good access to drilling and well services, as well as qualified personnel experienced in unconventional hydrocarbon extraction. Equally important are the stable tax regime and business-friendly regulatory environment.

ORLEN Upstream also holds a 10.7% share in a project involving the construction of a liquefied natural gas export terminal on Canada’s east coast (Nova Scotia province), Goldboro LNG, which is in an initial execution phase.

See more information on www.orlenupstream.pl

 

 

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