PGNiG Upstream Norway and its licence partners have decided to go ahead with the development of the Gråsel field in the Norwegian Sea, targeting first production in the fourth quarter of 2021.
The Gråsel field is located within the same licence unit as PGNiG Upstream Norway’s (PUN’s) producing fields Skarv and Ærfugl. It holds mostly oil, with its reserves estimated at 13 million barrels of oil equivalent. First oil from Gråsel is expected in the fourth quarter of 2021, when start-up of gas production from phase two of the Ærfugl development project is also planned.
‘Our priority on the Norwegian Continental Shelf remains natural gas, which we will be able to send to Poland once the Baltic Pipe pipeline is operational. But we are also keen to produce oil, particularly where it offers very attractive returns, which is the case with Gråsel,’ said Pawel Majewski, CEO of PGNiG SA, the sole owner of PUN.
Mr Majewski also noted that Gråsel has a break-even oil price of as low as USD 15 per barrel, far below the current price levels. This can be achieved thanks to the nearby production infrastructure, including the Scarv floating production and storage unit (FPSO), which will help to significantly reduce field development costs and improve the economics of the Scarv FPSO’s operation.
High production profitability in the region is the reason why PUN places a strong focus on its operations there. This year, the Norwegian subsidiary started production from four wells in the Ærfugl gas field, which are also tied back to the Skarv FPSO. In November, PUN announced an oil and gas discovery in the Alve Nord East prospect located near the Skarv field. Analyses are under way, which will determine whether the discovery receives development go-ahead. Skarv is PUN’s largest production asset on the Norwegian Continental Shelf, with oil and gas produced by 16 wells.
According to PGNiG Upstream Norway estimates, its share of gas production will reach 0.94 billion cubic metres by 2021, mainly owing to new field developments.
PUN holds an 11.92% interest in the Gråsel field. The operator is Aker BP, the other licensees being Equinor and Wintershall DEA.
PGNiG’s Norwegian subsidiary currently holds interests in 32 licences, with the acquisition of interests in another four licences awaiting approval by the Norwegian oil administration. The Company produces natural gas and crude oil from seven fields, with the number due to rise to nine once the approval is secured. PUN is also carrying out investment and analysis work on five other discoveries.