Equinor sells its share of Tommeliten field

Equinor announced Thursday that it has signed an agreement with PGNiG to sell its non-operated interests in the Tommeliten discovery on the Norwegian Continental Shelf for a total of $220 million.

Through the transaction Equinor will divest its 42.38 percent interest in the Tommeliten Unit and 30 percent interest in PL 044. Both are operated by ConocoPhillips. Closing of the sale is subject to approval by PGNiG’s supervisory board and customary conditions, including partner and authority approval.

Tommeliten Alpha is a gas and condensate field with documented recoverable resources amounting to 12.8 bcm of natural gas, 5.9 mcm of oil (approx. 5 million tonnes) and 0.5 million tonnes of NGL (according to the Norwegian Petroleum Directorate – NPD), equivalent to approx. 52 mmboe (net to working interest acquired by PGNiG). PGNiG believes in an upside potential in the field reserves. In addition there is a significant exploration upside in the direct vicinity of Tommeliten Alpha.

This latest gas field acquisition in Norway is of special importance to us. It means a significant increase in natural gas production in the region. It is from here that we plan to send gas to Poland via Denmark through planned Baltic Pipe pipeline. Thanks to this transaction PGNiG is entering high-profile group of oil & gas companies in the Ekofisk Area. The Tommeliten Alpha project allows us to implement our diversification strategy at attractive financial terms. This is good news to our shareholders,’ Piotr Woźniak, President of the Management Board of PGNiG SA said.

The purchase price was agreed to be 220 USD million at the contractual date of transaction on January 1, 2018. According to PGNiG estimates, the acquisition will allow to increase company’s gas production output from Norwegian portfolio by 0.5 bcm/year in the first six years of the production. In addition Tommeliten Alpha will allow PGNiG to extract approx. 0.5 million tonnes of oil and NGL in the peak production year.

“First of all, it will significantly increase our production in the region from which the Baltic Pipe gas pipeline is planned to send gas to Poland. Thanks to this transaction, we enter the elite group of companies that carry out extraction from the Ekofisk area, where one of the largest hydrocarbon deposits in Europe is located,” he added. “The Tommeliten Alpha project allows us to implement a strategy of supply diversification and is economically attractive, and this is good news for shareholders,” Wozniak continued. Aker BP entered into an agreement with Equinor to acquire its 77.8 percent interest in the “King Lear gas/condensate discovery”, located in the Norwegian North Sea, for a cash consideration of $250 million.

PGNiG Upstream Norway currently has interests in 20 exploration and production licenses on the Norwegian Continental Shelf, and is the operator of two of them. PGNiG established its presence in Norway in 2007. PGNiG Group’s recoverable reserves in Norway are currently 83 million boe (according to NPD as of 1st January 2018). After the acquisition of shares in the Tommeliten Alpha discovery has been finalized, this amount will increase to 135 million boe (according to NPD as of 1 January 2018).

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