LOTOS Petrobaltic, part of the LOTOS Group, specializes in extraction of crude oil and associated natural gas in the Baltic Sea. Presently, the company made a step forward into the offshore wind business.
The energy sector is undergoing immense transformation. What does this mean for a company like LOTOS Petrobaltic (LPB) that has oil & gas at its core?
We are doing our best to adjust to the new market demands as well to the wellbeing of the planet. For instance we are diversifying our fuels.
Hydrogen is likely the resource of the future and very much draws our interest, but as a next step we are keen to move deeper into the offshore wind business.
It is a challenge no doubt, because we started activity in the Baltic Sea in 1974 and our expertize revolves around oil & gas. But we are also the first and only company to operate logistically in the Polish part of the Baltic Sea - this means we know everything about its shores and hold all the geological info in our archives.
Moving into offshore wind is an interesting departure given that gas is seen as a transition resource and expected to be around for many years still…
But gas is not preferred by financial institutions and EU institutions. Maybe it is not that bad yet, but the future is unclear. That is why our strategy now is to become a leader in offshore wind in the Baltic Sea, our cradle and the area where we are the most experienced operator. We are already involved in geo surveys and plan to utilize our fleet and participate in all stages from construction to installation, servicing etc.
Financing wise two thirds of CAPEX have been secured locally and we are encouraging our partners and banks to secure the remaining third. Now it just boils down to regulations which will hopefully be set in place this year.
Are there any challenges that stand out?
If we put aside the expected consequences of COVID-19 and the current price of an oil barrel that is crucial for our core business, the challenge we have is to prepare the company for future tasks connected with green energy demand. Fortunately we are surrounded by experienced design offices and shipyards such as CRIST, that are capable of building offshore wind suitable vessels. We are in touch with classification societies and vendors as well as the turbine suppliers and developers. This is our truest response to changing market conditions and we place our faith in offshore wind.
You have, however, begun reconstruction of B3 oil field and continue production in B8 - how will these play out in the future of the company?
Our core business and background is upstream. We hold the licenses and remain the operator of the B3 and B8 fields. They contain rich deposits of oil and gas, especially B8, which is planned to be developed further. The oil that is produced by LPB is ultra-light and being used for special purposes by the Grupa LOTOS refinery. We used to call it “green gold” as it is actually green in color, not black.
Do you already have a sense of how the COVID-19 outbreak will be impact your business/the energy sector in the short term?
The market impact is enormous. Luckily our experience is helping us survive this difficult time, but it is an ongoing battle. It starts from simple crew changes and comes down to financial standing. One thing is for sure – the world will be changed and nothing will be the same as before COVID-19.
What first measures did LOTOS Petrobaltic set in place to manage the crisis?
Our first thoughts are always with the employees, therefore the very first measures were about their safety and security.
We decided to freeze several projects and related activities to limit the personnel rotation on board the platforms. We keep our motto alive – safety first! Our people’s health is always on the first place.
