GRI Disclosures:

In line with its strategy, the ORLEN Group intends to continue exploration and production efforts to increase output and secure a wider access to own resources of hydrocarbons based on the scenario of prudent continuation.

Upstream and production 2020





2P oil and gas reserves

million boe




million boe per year



Average production

‘000 boe per day



Production structure (liquid/gas)




Wells (net)1








Number of new wells in 2020 adjusted for interests held by other partners.

The project activities in 2020 were carried out on the basis of the ORLEN Group’s strategy for 2019–2022, which assumed, interalia, flexible response and adaptation of CAPEX to changes in the hydrocarbonprice market, revision of the exploration project portfolio, and concentration of investment activities on the most profitable and prospective projects in Poland and Canada.

The international team of experts from Poland and Canada has the necessary competence and experience to carry out PKN ORLEN’s mission and vision of exploration for and production of crude oil and natural gas through efficient management of a diversified portfolio of assets.

At the end of 2020, the ORLEN Group held, on its own or with a partner (PGNiG), 16 exploration and appraisal licences in Poland, covering a total area of almost 11.8 thousand sq. km. and spread over six provinces, with 2P reserves of 10.1 million boe. The ORLEN Group holds 100% interests in ten licences, 49% interests in four licences and 49% interests in parts of two licences within a separate licence area.

In Alberta, Canada, the ORLEN Group is a recognised operator and holds exploration and production assets covering a total area of 358.5 thousand acres (approximately 1.5 thousand sq. km.) gross, and 234.8 acres (approximately 1.0 thousand sq. km.) net, i.e. calculated based on the size of interest, with total 2P reserves of approximately 163.9 million boe.

Operationsin Poland

The ORLEN Group conducts exploration and production activities in Poland only through its subsidiary ORLEN Upstream Sp. z o.o.

The Group’s operations in Poland comprised hydrocarbon exploration and production. Currently, PKN Orlen produces gas domestically in cooperation with PGNiG S.A. (the Płotki Project) and on its own (production from the Bystrowice field as part of the Miocen Project, commenced at the end of December 2020). The ORLEN Group’s total annual output in Poland reached 1.0 thousand boe per day. The main project activities in Poland were carried out in three oil provinces.

In the Kraków Oil Province, work was performed under three projects. As part of the Miocen Project, PKN Orlen continued development of the Bystrowice gas field as the general contractor. December 24th 2020 saw the launch of production from the first independent Mining Facility of ORLEN Upstream – the Bystrowice Gas Production Facility. As regards the Miocen Project, an analysis of reserves and prospects in the Siennów-Rokietnica licence area was carried out, preliminary selection of locations for future drilling was made, and administrative procedures were commenced.

Under the Karpaty Project, regional 2D seismic profiles and 3D seismic data was processed. Work was also under way to prepare the plan and technical and methodological requirements for Grybów 3D seismic imaging. Following geological and economic analyses, in September 2020 a decision was made to discontinue further work in the 434-433 licence block (the licence was relinquished in the fourth quarter of 2020).

Under the Bieszczady Project, pursued together with a partner (PGNiG S.A.), the drilling of Dylągowa-1 well, commenced in late 2019 and early 2020, was continued. At the end of July 2020, a string seizure occurred and following unsuccessful running of production logging tools a decision was made to abandon the well. Given negative results of an economic analysis of the area’s prospects, in the second quarter of 2020 a decision was made to discontinue the Bieszczady Project (on April 30th 2020, a notice was submitted to terminate the Joint Operations Agreement concerning three licences, and two joint licences were relinquished).

In the Poznań Oil Province work was performed on two projects implemented under a Joint Operations Agreement with PGNiG S.A. Under the Sieraków Project, drilling work on the Sieraków-2H well was performed at the end of September 2020 and short-term production tests were carried out on the horizontal well. The operator (PGNiG S.A.) also carried out administrative and tender procedure activities related to the development of the Sieraków-2H well.

As part of the Płotki Project, in 2020 the Brzezie-Gołuchów 3D seismic data acquired in the previous year was processed and interpreted. The drilling of the Pławce-3/3H well, commenced in late 2019 and early 2020, was continued. In May 2020, the well was decommissioned following an accident preventing the continuation of drilling work. On the other hand, the drilling of Grodzewo-1 well yielded positive results and production tests were carried out. An analysis of the acquired data is in progress. At the beginning of 2021, another well is planned to be drilled in the area; the construction of a site for drilling the Bystrzek-1 well was completed in 2020. Planning and formal and legal work on the development of the Chwalęcin gas field was also carried out.

In the Gdańsk Oil Province, work was carried out within five old licence areas and two new licences were acquired under the Edge Project. In 2020, Wilcze 3D seismic data acquired in the previous year was processed and interpreted. Seismic field work was also carried out for the Koczała-Miastko 3D seismic imaging. Formal, administrative and conceptual work for future drilling of exploration wells was conducted. As part of the development work, planning and preparatory work for the development of the Tuchola and Bajera fields based on gas-fired generation of electricity was carried out. Design documentation was prepared, applications pertaining to the location of buried power lines and obtaining the right to land for laying buried power lines were processed, procurement procedures were completed, and the supplier of generator sets and contractors of production centres were selected. Both fields are expected to start production in December 2021.

ORLEN Group’s upstream projects in Poland

100% Share of the ORLEN Group49% Share of the ORLEN Group (join venture project)Concession granted in 2020Concession granted in 2020Province nameProject name XXX XXX GREATER POLAND OIL PROVINCE POMERANIAN OIL PROVINCE LESSER POLAND OIL PROVINCE Source: In-house analysis.

Operationsin Canada

The ORLEN Group conducts production operations in Canada via its subsidiary ORLEN Upstream Canada Ltd. (“OUC”).

In view of favourable macroeconomic conditions in late 2019 and early 2020, the project programme was accelerated and the drilling plan for the first half of 2020 was fully delivered before the end of the first quarter of the year (two drillings were commenced in the fourth quarter of 2019). Following a steep decline in oil prices on global markets which started mid-March 2020, the Company reviewed its project programme for the remainder of the year. CAPEX for the remaining months was reduced and partly moved to the next year due to market uncertainty and the risk of inability to finance project work as originally planned.

The 2020 capex programme focused primarily on the key areas of Ferrier and Kakwa in the Province of Alberta.

  • Within the Ferrier area, drilling of five wells (4.87 net) began. In addition, hydraulic fracturing was performed on three wells (2.87 net), which were later brought on stream.

  • Within the Kakwa area, drilling of three wells (2.75 net) began. Hydraulic fracturing was performed on four wells (3.75 net), which were later brought on stream.

  • In the Lochend area, two wells (1.0 net) were brought on stream.

Apart from drilling and fracturing operations, work was carried out to optimise production and reduce operating expenses by installing dedicated downhole equipment in the Kakwa, Ferrier and Lochend areas. In all areas, pro-environmental measures were continued to reduce greenhouse gas emissions and meet all environmental requirements of the Federal Government of Canada and the Provincial Government of Alberta, including by reducing flaring, preventing methane emissions, conducting regular inspections and adaptation of infrastructure, and upgrading engines and other equipment with an effect on emission volumes.

In 2020, the average output was 17.0 thousand boe/d, of which 46% were liquid hydrocarbons (crude oil and NGL, including condensate, which had the largest share in revenue and profits from production).

Good reservoir properties of the assets and their location in a well-surveyed area minimise the operational risks of the projects. The Canadian upstream market is a very mature one – with a very high number of drilling wells, thorough geological surveys, presence of many upstream and service operators and transparent regulations governing the industry, it is characterised by high data availability, relatively well developed operational solutions and cost optimisations. On the other hand though, the oversupplied local market is facing infrastructure constraints, which at times adversely affect the Canadian hydrocarbon prices. A gradual reduction of pipeline capacity constraints and step-by-step expansion into new hydrocarbon sales markets are expected within the next few years.

Seeking to achieve operational synergies and focus on the most profitable areas, ORLEN Upstream Canada is keeping a watchful eye on the local market. During the year, selected assets located in the key business areas of ORLEN Upstream Canada, namely Ferrier and Kakwa, underwent a detailed technical and economic analysis. Given the unstable macroeconomic situation, no final purchase bid was submitted in either of the contemplated transactions. In order to secure partially expiring exploration and production rights in the southern part of the Blackstone area, in February 2020 a decision to enter into cooperation with Tourmaline was made. In exchange for a portion of its interests in selected sections of the Blackstone asset, the Company obtained well data which allowed it to retain its licence rights without having to incur any capital expenditure. As part of the process to divest areas of minor importance, in May 2020 ORLEN Upstream Canada decided to sell sections located in the Chambers region (north of the Ferrier area), where the Company does not have any production assets and does not plan to carry out any project activities.

ORLEN Upstream Canada holds a 2.3% interest in integrated company Pieridae Energy, the operator under the project to develop an LNG export terminal in Nova Scotia. At present, Pieridae expects that the terminal will be commissioned in late 2025 or early 2026. Despite the relatively advanced stage of project preparation (obtaining of the required permits, contract with the main customer in Germany, advanced negotiations with contractors, completed consultations with local communities, and acquisition of natural gas deposits in Alberta by Pieridae), the decision to proceed with the Goldboro LNG project is still uncertain due to, among other things, problems with raising project funding in the current market environment.

Assets in Canada


Upstreamsales volumes

Sales volumes of the ORLEN Group Upstream segment [PLN million/’000 tonnes]




% change












Crude oil







Natural gas





















1) Other – in volume terms the item includes NGL (Natural Gas Liquids) and in value terms it includes sales of NGL and revenue services rendered by the segment.

Production and sale of hydrocarbons in Canada were conducted through ORLEN Upstream Canada Ltd., and in Poland – through ORLEN ORLEN Upstream Sp. z o.o.
In 2020, the combined volume of sales on the two markets was 742 thousand tonnes, having gone up 1% year on year, driven by higher hydrocarbon production in Poland and Canada.


Sales structure of the ORLEN Group Upstream segment

Crude oilNatural gasOther 13.0% 13.7% 62.4% 60.0% 23.9% 27.0% 2020 2019

ORLEN Group Integrated Report

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