Monday 27 September 2021

PGNiG Upstream Norway has obtained the consent of the Norwegian administration to take over all the assets of INEOS E&P Norge. Thanks to the finalization of the transaction, the PGNiG Group will acquire a package of prospective deposits, which will significantly contribute to the implementation of strategic goals in the field of natural gas extraction.

The Norwegian authorities approved the purchase by PGNiG Upstream Norway of all INEOS E&P Norge assets, including interests in 21 licenses. Thus, the company may finalize the contract with the INEOS Group, signed in March 2021. The estimated settlement amount for the transaction will be approximately USD 323 million (approximately PLN 1.27 billion) compared to the original price of USD 615 million for the contractual transaction date of January 1, 2021. The difference is due to the reduction of the originally agreed purchase price by the revenues that INEOS E&P Norge received during the first nine months of the year.

- This is a very advantageous transaction that demonstrates PGNiG's competence in the field of investments in the hydrocarbon exploration and production market. The purchase of the INEOS E&P Norge license allows us to achieve one of the strategic goals in the field of security and diversification of gas supplies, and at the same time expands our portfolio with prospective assets with high profitability - emphasized Paweł Majewski, President of the Management Board of PGNiG SA. The company is the sole owner of PGNiG Upstream Norway.

The acquired concessions include deposits from which production is already underway: Ormen Lange (14%), Marulk (30%) and Alve (15%). The key asset is Ormen Lange - the second largest natural gas field on the Norwegian Continental Shelf. Moreover, PGNiG Upstream Norway owns 8.2 percent. shares in the Nyhamna gas terminal (8.2%), servicing, inter alia, the Ormen Lange and Aasta Hansteen fields.

The transaction will significantly increase the recoverable hydrocarbon reserves of PGNiG Upstream Norway to 331 million barrels of crude oil equivalent (as of January 1, 2021). The company will also increase the production of natural gas by approx. 1.5 billion cubic meters. annually. Taking into account the forecasted volume of production from previously held licenses, next year the PGNiG Group will achieve the volume of natural gas production from deposits on the Norwegian Continental Shelf at the level of approx. 2.5 billion cubic meters. This means the achievement of the goal set out in the Group's Strategy for 2017-2022.

After the Baltic Pipe gas pipeline is commissioned, the fuel produced by PGNiG Upstream Norway will be delivered to Poland, increasing the level of gas supply diversification and thus the country's energy security.