PGNiG Starts Production From Ærfugl Field in Norway

April 26, 2020 | Oil & Gas | Energy Facts Staff Writer | 3min

PGNiG Upstream Norway has started production from yet another field on the Norwegian Continental Shelf. The licence partners, including AkerBP as an operator and PGNiG as a partner, have brought on stream the first production well in the Ærfugl field, with further wells planned to start production later this year.

Ærfugl is extremely attractive in terms of profitability. Production from the field is economically viable at oil prices above USD 15 per barrel, as wells can be connected to the existing Skarv FPSO vessel, significantly reducing field development costs. Therefore, PGNiG Upstream Norway and its licence partners have determined to proceed with the start-up despite the challenging market environment driven by subdued hydrocarbon prices.

“Thanks to a well thought-out investment strategy and excellent relationships with our licence partners, we are capable of expanding our upstream operations on the Norwegian Continental Shelf even amid market headwinds like those experienced today,” said Jerzy Kwieciński, President of the PGNiG Management Board. “We are closely monitoring the situation on the Norwegian Continental Shelf, which is feeling the impact of the coronavirus pandemic like the rest of the world. So far production on licences where PGNiG is a partner as well as other licences in the region has continued without disruption.

The development plan for the Ærfugl field envisages drilling six well in two phases. The well that has just started production is the first of three wells planned in the second phase of the development. The phase-two wells were originally slated for production start-up in 2023. The development work accelerated after technical measures were taken to increase the Skarv FPSO’s capacity.

Production from the other two wells planned in phase two of the development is expected to start in 2021, whereas the three wells in phase one are planned to start production in late 2020.

Ærfugl is a gas and condensate field with recoverable reserves estimated at 300 million barrels of oil equivalent. In the peak year, PGNiG’s production from the field will reach roughly 0.5 bcm of natural gas, to be fed into the Baltic Pipe.

PGNiG Upstream Norway holds an 11.92% interest in the licence. The operator is Aker BP and the other partners are Equinor Energy and Wintershall DEA.

Following the production start-up in Ærfugl, the number of PGNiG Upstream Norway’s producing fields has increased to seven. Investment and analytical work is underway on another four fields. The company currently holds interests in 29 licences on the Norwegian Continental Shelf. Transactions to purchase interests in another two licences are in their final phase.