OREANDA-NEWS. Polskie Inwestycje Rozwojowe S.A. (PIR) and LOTOS Petrobaltic S.A. (LPB) signed an agreement on the financing of an investment project to develop the B8 crude oil field in the Baltic Sea. The project is to be carried out by a special purpose vehicle, with LPB holding a production licence for the field.

"The investment in the B8 development project has an average risk exposure profile, as PIR only invests in low- or medium-risk projects, which usually fall within the realms of infrastructure or private equity funds. The kinds of high-risk projects that are typical of venture capital, are out of question", stresses Mariusz Grendowicz, President of Polskie Inwestycje Rozwojowe S.A.

Development work on the B8 field so far has been financed by LOTOS from internally generated funds. The agreement provides for the establishment of a special purpose vehicle (SPV), a wholly-owned subsidiary of LPB, to carry out the remaining work on the B8 field. This includes the conversion of the LPB's drilling platform into a production unit, the preparation of subsea infrastructure, and the drilling of the last injection wells before the field comes on-stream.

"The launch of commercial production from the B8 field is planned for the end of 2015. We estimate the field's reserves at 3.5 million tonnes of crude oil. LOTOS Petrobaltic expects to produce approximately 220 thousand tonnes of crude oil per annum from the field", notes Zbigniew Paszkowicz, President of LOTOS Petrobaltic S.A. and Vice-President, Chief Exploration and Production Officer, of Grupa LOTOS S.A.

"Our involvement in the B8 field production project in the Baltic Sea is fully consistent with the goals of Polskie Inwestycje Rozwojowe S.A., and I'm very happy that PIR's first project will also help to increase the diversification of Poland's energy sources", says Mariusz Grendowicz, President of PIR.

Once the final agreements are signed, the project will be co-financed by third parties, including PIR and commercial banks.

"The upstream segment is viewed by LOTOS as its strategic priority until 2015. As part of the 'Effective and Rising 2013-2015' programme, the Baltic Sea will be the focus of LOTOS Petrobaltic's operations. According to available geological data, potential crude oil reserves in the company's Baltic licence areas are estimated at 30m tonnes, and making optimum use of these assets will allow us to improve Polish energy security. We are delighted to be working with Polskie Inwestycje Rozwojowe, and we appreciate their input," pointed out Pawel Olechnowicz, CEO of Grupa LOTOS S.A.