Poland’s PGNiG signs deal on gas exploration in Ukraine.

Poland’s state-owned oil and gas company PGNiG has signed an agreement with the Ukrainian-American Energy Resources of Ukraine (ERU), which provides for joint exploration of gas in Ukraine.

That’s according to a statement by PGNiG, seen by Ukrinform.

It is noted that the agreement provides for the purchase by the Polish company of a controlling stake in Ukrainian Karpatgazvydobuvannia, the sole holder of a license to extract gas at Biblivska Oil and Gas Square in western Ukraine, in the area adjacent to the border with Poland. From a geological perspective, the area is an analog of Przemyśl, Poland's largest natural gas field, which PGNiG has been exploiting for more than 60 years already, the statement said.

Read also: Russia to use Nord Stream 2 to blackmail Ukraine – Poland’s foreign ministry

As a result of the agreement, PGNiG shall acquire 85% of Karpatgazvydobuvannia shares, the statement explains.

According to the schedule of licensing works agreed between the partners, the completion of preparations for drilling an exploration well is scheduled for late 2021. The drilling of the well is scheduled for the second half of 2022 with further testing planned. If positive results are achieved, the well will be connected to the Ukrainian gas grid and put into operation in 2023, the statement said.

Karpatgazvydobuvannia shareholders also plan to conduct additional geophysical surveys of the licensed area to help design further wells.

As Ukrinform reported earlier, in May of this year, PGNiG obtained from the Antimonopoly Committee of Ukraine a permit to acquire a controlling stake in Karpatgazvydobuvannia, which is owned by ERU.

Read also: For EU security, gas transit via Ukraine should be maintained at least until 2035 – Naftogaz CEO

In December 2019, PGNiG and ERU signed a cooperation agreement in gas exploration and extraction in western Ukraine, near the border with Poland. The Polish company then stated they had the relevant experience and know-how for gas production in the region.

Last year, PGNiG sold 1.2 billion cubic meters of gas to Ukraine, and another 210 million cubic meters in the first quarter of 2021.

Ukrinform has inquired for comment from EUR on the said deal.

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