Upstream assets and production volume
The LOTOS Group is engaged in exploration and production activities in Poland, Norway and Lithuania. In 2020, hydrocarbons were produced from fields located in:
- the Baltic Sea – mainly crude oil with a small amount of associated natural gas,
- Norwegian Continental Shelf – natural gas and condensate (i.e. light crude oil) with a higher share of the gas,
- onshore Lithuania – crude oil.
In 2020, the LOTOS Group’s average daily volume of oil and gas production was 20.3 thousand boe, which translates into an annual volume of some 1 million toe. Approximately 71% of that total output, i.e. 14.4 thousand boe/d, came from the Norwegian fields.
At the end of 2020, the LOTOS Group’s total 2P (proved and probable) reserves were estimated at 74.8 million boe, including 61.0 million boe of crude oil (82% of the total 2P reserves) and 13.8 million boe of natural gas (18% of the total 2P reserves).
LOTOS Group’s hydrocarbon reserves and output
2P oil and gas reserves as at December 31st 2020
Average daily oil and gas output in 2020
Source: the Company.
In 2020, the COVID-19 pandemic brought about unprecedented and very rapid changes in the oil and gas markets. The upstream segment was adversely affected by low prices of crude oil (down 34.7% year on year) and natural gas (down 27.6% year on year).
As at the end of 2020, Grupa LOTOS S.A.’s 2P oil and gas reserves totalled approximately 74.8 million boe, with the Group’s average hydrocarbon production at 20.3 thousand boe/d.
The development of the B8 production field was completed and confirmed by a 30-day production test.
Eight wells were worked over on the B3 field, enhancing production levels.
The upgrade of the Maersk Inspirer rig was completed in 2020, with the rig successfully installed near the jacket on the YME field in December.
Conceptual work on the optimum development of the NOAKA fields was stepped up following the Norwegian Parliament’s decision to approve additional tax breaks for the oil and gas sector to stimulate investment and protect jobs. They will facilitate economically effective development of the fields even if the low prices of crude oil were to continue on the market. The Plan for Development and Operations (PDO) is to be prepared and submitted for approval to the Norwegian authorities by the end of 2022.
Oil and gas sales structure
|(by volume)||(%)||(by volume)||(%)|
|Natural gas (million boe)||3.55||44.10%||3.95||57.90%|
|Oil (million bbl)||4.5||55.90%||2.87||42.10%|
|Total oil and gas (million boe)||8.06||6.83|
Source: the Company.