Poland Readies for Ukraine Gas Exploration

Polish state PGNiG has signed an investment agreement with Energy Resources of Ukraine (ERU) to set up a joint exploration and production (E&P) project in Ukraine near the Polish border, it said October 12. This will be its first venture into the upstream in the former Soviet Repubic, although it has agreed a number of gas supply deals with ERU. 

"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 Przemysl, Poland’s largest natural gas field. The agreement is an important step towards the launch of joint operations in the area," PGNiG said.

PGNiG and ERU announced a very similar agreement in December last year, involving joint gas E&P work in western Ukraine.

In order to protect themslves from the political risk attached to investments in Ukraine, PGNiG and ERU have opened talks with the US International Development Finance Corporation and Poland’s export credit insurance agency KUKE,  PGNiG said.

"We are glad to have the opportunity to expand our exploration and production operations in new markets with a reliable business partner,’ said PGNiG CEO Jerzy Kwiecinski. 

ERU managing partner Dale Perry said that as it expands into E&P, ERU was encouraged and pleased to have an experienced partner such as PGNiG. "We see this as an important area for our company, as well as the wider regional development in energy co-operation and diversification," he said. Work is expected to start in the first half of 2021.