Orlen to Pursue Conventional, Shale Gas Projects in Ukraine

PKN ORLEN and the Ukrainian Ministry of the Environment have signed an agreement on cooperation in exploration and production of hydrocarbons in the territory of Ukraine. In accordance with the agreement, PKN ORLEN will be able either to work under new licenses or to jointly develop some hydrocarbon reserves already appraised by its Ukrainian partners.

The agreement was signed in Kiev Monday by Jacek Krawiec, President of PKN ORLEN's Management Board, and Nikolay V. Zlochevskyy, the Ukrainian Minister of the Environment and Natural Resources. Present at the occasion were also representatives of ORLEN Upstream, the Group's exploration and production arm, which will be directly engaged in cooperation with the Ukrainian side.

Under the cooperation agreement, PKN ORLEN and its Ukrainian partners are to jointly conduct exploration and production projects, related to both conventional deposits and shale gas. A decision on any equity involvement will be preceded by and based on in-depth analyses and expert opinions prepared by partners under the agreement.

"We have made another momentous step in the development of our upstream segment," said Jacek Krawiec, PKN ORLEN's President. "Importantly, we are launching operations in Ukraine - one of the development directions envisioned in our strategy. Our plans will be implemented together with Ukrainian partners, who possess a wealth of relevant expertise. We pin high hopes on that cooperation on account of the Ukrainian know-how, as well as that country's abundant hydrocarbon resources. We will also be evaluating the potential of unconventional gas."

Ukraine is endowed with significant resources of crude oil and natural gas. Three petroleum basins have been identified in its territory:

  • The Dnieper-Donets Basin (Poltavskyi Basin), where the in-place unappraised resources, as estimated by international experts, amount to 150 million tonnes of oil and 850 billion cubic meters of gas.
  • The North Carpathian Basin, which—also in Poland—is the oldest producing petroleum basin.
  • The Black and Azov Sea Basin, which comprises both onshore and offshore areas lying within the boundaries of Ukraine. So far, it is the least explored of the Ukrainian petroleum basins.

PKN ORLEN is currently engaged—through its subsidiary ORLEN Upstream—in four exploration and production projects: in the Latvian section of the Baltic Sea shelf, where it is cooperating with Kuwait Energy Company, in the vicinity of Sierakow, where it is operating jointly with PGNiG, and in the Lublin region, where it is carrying out another two projects individually. The company holds a total of seven licenses, under which it is appraising conventional deposits with gas-condensate potential, as well as unconventional deposits, primarily shale gas. The work is currently at a stage of initial exploration and preparations for drilling, which Orlen Upstream has scheduled for next year.


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