Polskie Górnictwo Naftowe i Gazownictwo (PGNiG) has signed an investment agreement with Energy Resources of Ukraine (ERU) on a joint exploration and production project in Ukraine.

The agreement sets a general framework for cooperation and provides a schedule of further work on a project located near the Polish border in Ukraine. The strong production potential of the licence is supported by the findings of geological surveys conducted by PGNiG, which show a correlation of its geological structures with Przemyśl, Poland’s largest natural gas field. The agreement is an important step towards the launch of joint operations in the area.

An important element of any investment project undertaken in Ukraine is insurance against political risks. In order to provide financial protection for the joint project of PGNiG and ERU, talks have been initiated with the US International Development Finance Corporation and Poland’s Export Credit Insurance Corporation (KUKE).

‘The licence is our first exploration prospect in Ukraine, located in a very promising geological zone, encompassing also the Przemyśl field. We have all required technology and equipment resources, and our employees have knowledge and expertise gained over 60 years of exploration and production operations in the Rzeszów region. This provides a strong foundation for the project’s success. We are glad to have the opportunity to expand our exploration and production operations in new markets with a reliable business partner,’ said Jerzy Kwieciński, President of the PGNiG Management Board.

‘Over the past five years we have participated in many successful collaborations with PGNiG. As we expand into E&P, we are encouraged and pleased to have an experienced partner such as PGNiG and we look forward to taking this next step with them. We see this as an important area for our company, as well as the wider regional development in energy cooperation and diversification,’ – said Dale Perry, Managing Partner of ERU Group.

‘Our collaboration with ERU in the field of hydrocarbon production is consistent with the policy of diversifying gas supply sources pursued by Poland and Ukraine. The two companies aim to ensure stable and secure supply of natural gas to Polish and Ukrainian customers. We can already see positive effects of projects implemented in recent years by Central and Eastern European countries that have increased the integration of gas transmission systems of neighbouring countries. We believe that further energy market integration will contribute to strengthening energy security across the region,’ added PGNiG CEO.

Work is scheduled to commence in the first half of 2021 after all necessary consents and permits have been secured.

About PGNiG

Polish Oil and Gas Company (PGNiG) deals with exploration and production of natural gas and crude oil and – through its branches and key companies from the Capital Group – with import, storage, sales, distribution of gaseous and liquid fuels, production of heat and electricity as well as geophysical and drilling services. Its subsidiaries and branches carry out exploration and production activities in Norway and Pakistan, gas sales in Germany and LNG trading through an office in London.

About ERU

Energy Resources of Ukraine (ERU) is Specialized in the development of energy projects in Ukraine. The company integrates its management experience, a deep understanding of the local market and an expertise developed during over 35 years of successful operations in the energy sector all over the world.