Polskie Górnictwo Naftowe i Gazownictwo SA and Central European Petroleum GmbH (CEP) signed agreements on joint operations in a designated part of the Lubben licence area located in the state of Brandenburg in Germany. As part of the arrangement, the companies will carry out crude oil and natural gas exploration, appraisal and production operations. PGNiG SA’s financial commitment as part of the project is expected to exceed EUR 10m by the half of next year.

Under the signed agreements, PGNiG SA will acquire a 36% interest in future revenue from the potential production of crude oil and natural gas. Project partners in the designated part of the Lubben SW area include CEP (39%), the licence operator, and Rohöl-Aufsuchungs Aktiengesellschaft RAG of Austria (25%).

“PGNiG SA’s involvement in the project is an element of the strategy adopted by the Management Board, under which one of the Company’s overriding objectives is to increase oil and gas output abroad through the acquisition of exploration and production assets. Together with our project partners, we intend to begin drilling the first exploration well before the end of the year,” said Zbigniew Skrzypkiewicz, Vice-President of the PGNiG Management Board, Exploration and Production.

The goal of the exploration project is to find potential crude oil accumulations, which may be comparable to those of the Lubiatów-Międzychód-Grotów field discovered by PGNiG in recent years as one of Poland’s largest crude oil deposits. The aggregate initial recoverable crude oil reserves at LMG were estimated at approximately 7 million tonnes. PGNiG will cover part of the cost of drilling exploration wells and will reimburse part of the costs incurred previously on the licence area by Central European Petroleum GmbH. The initial plan provides for drilling two wells.7

About PGNIG

The PGNiG Group is the leader of the Polish natural gas market, as well as the only vertically integrated gas company in Poland. Its parent undertaking is Polskie Górnictwo Naftowe i Gazownictwo. Formation of the Group's enabled coordination of the upstream and downstream operations - from exploration and production to storage to trade and distribution of gaseous fuels. The roots of the companies forming PGNiG date back to 19th century - to the beginnings of Polish and world oil industry. The company has been operating under the name PGNiG since 1982. In 1996, the state-owned company PGNiG was transformed into a joint stock company.