PGNiG Sets Up Shop in Egypt

PGNiG opened its branch in Cairo, Egypt, on October 14, 2009. This is directly related to the Company's plans and activities in this country. In Egypt, PGNiG SA will focus on primarily exploration for and subsequently the production of crude oil. The reserves of this raw material under the license awarded to the Polish company are estimated at 22 million tonnes.

The Exploration License covers Bahariya (Block No. 3) located in an oil region in the Western Desert, approximately 200 km south-west of Cairo. The license covers an area of 4414.4 square kilometers and is the largest foreign exploration license exploited by PGNiG. In 2007, PGNiG won a tender for its exploitation. The commencement of production became possible upon the acceptance of the awarding of the tender by the parliament followed by the signing of the Exploration and Production Sharing Agreement between the Egyptian Government and PGNiG on May 17, 2009.

In accordance with the license, PGNiG is obliged to perform 1,350 km of 3D seismic surveys and drill two boreholes. If any deposits are discovered, they will be developed and drilled for oil. PGNiG SA is the only operator under the license and owns 100% of shares. The estimated cost of the exploration works in this area is USD 48 million.

The project for gravimetric research in the area covered by the license has already been prepared. The work contractor selection procedure is currently in progress. The financial expenditure planned for 2009 is approximately PLN 10.5 million. Next year's actions include field gravimetric works and the commencement of 2D seismic works. The expenditure planned for this period amounts to PLN 55 million.


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