13 November 2020

PGNiG Group boosts its output on the Norwegian Continental Shelf

13 November 2020

PGNiG Upstream Norway and its licence partners have brought on stream another three wells in the Ærfugl field. This will enable the company to increase its total output of natural gas on the Norwegian Continental Shelf to almost 1 bcm in 2021.

PGNiG Upstream Norway (PUN) has commenced production from three wells drilled in Phase 1 of the Ærfugl field development plan on the Norwegian Continental Shelf. Thus, five wells are operated in the field now: three drilled during Phase 1, one from Phase 2, and one test well (A-1 H).

"The new wells in the Ærfugl field were commissioned according to the schedule, despite the difficulties caused by the coronavirus epidemic. Their launch will not only significantly increase the PGNiG Group’s natural gas output in Norway, but will also have a very favourable effect on the financial performance of PUN. Ærfugl is one of the most profitable projects on the entire Norwegian Continental Shelf,” said Paweł Majewski, President of the Management Board of PGNiG SA, sole owner of PUN.

PUN expects the total output from the three wells to reach 0.24 bcm of natural gas in 2021. Together with the yield from the other two wells, the volume of natural gas produced from Ærfugl and attributable to PGNiG will be 0.47 bcm then. Therefore, PGNiG’s total gas production on the Norwegian Continental Shelf may reach 0.94 bcm in 2021.

The Ærfugl field development plan envisages drilling six production wells in two phases, three in each phase. In April 2020, the first well from Phase 2 was brought on stream. The other two will be commissioned in 2021 – two years ahead of the original schedule. Once the entire licence development plan has been completed, Ærfugl’s annual gas output attributable to PGNiG’s Norwegian subsidiary will be 0.5 bcm in the peak period. The fuel will be transported to Poland via the Baltic Pipe, currently under construction.

The total recoverable reserves of the Ærfugl field are estimated at over 300 mboe, of which more than 254 mboe (including 29 bcm of gas) are still to be extracted. Modern technical solutions are used in the operation of the wells, including heating of the pipelines carrying the fuel to the FPSO Skrav platform. This prevents precipitation of hydrates, which could block the gas flow.

PUN holds an 11.92% interest in the licence covering the Ærfugl field. The operator is Aker BP and the other partners are Equinor and Wintershall DEA.

Currently, PUN holds interests in 32 licences on the Norwegian Continental Shelf (the acquisition of interests in another four licences is awaiting approval by the Norwegian oil administration). The company produces crude oil and natural gas from seven fields and conducts analytical and project work on another five.