Poland's Lotos signs deals to finance Baltic oil field project

WARSAW Mon Aug 25, 2014 6:56am EDT

WARSAW Aug 25 (Reuters) - Poland's second-largest oil refiner Grupa Lotos said on Monday it had raised 1 billion zloty ($315 million) through two deals, to help finance an oil field project in the Baltic Sea.

The company will add about 800 million zloty from its own funds to complete the financing of the project to launch production from its B8 field by the end of next year.

Lotos said the B8 field had launched a special purpose vehicle (SPV), controlled by Lotos' upstream arm, that secured $210 million in senior debt financing from the state-owned lender BGK and Bank Pekao.

The special purpose division also signed a deal with a state-run investment vehicle, PIR, for an additional 333 million zlotys ($105 million) in subordinate debt.

The B8 field is estimated to have about 3.5 million tonnes of oil and the company is planning to produce some 250,000 tonnes of oil a year from the concession.

The state-controlled Lotos produced 146,000 tonnes of oil and 16 million cubic metres of gas from its Baltic fields last year but wants to boost output of both over the coming three years. It estimates that its Baltic concessions have 30 million tonnes of oil.

Earlier this month, Lotos said it wanted to issue shares worth about 1 billion zlotys to finance more oil and gas production as part of Poland's drive to diversify its energy sources, now mostly provided by Russia. (1 US dollar = 3.1661 Polish zloty) (Reporting by Anna Koper and Adrian Krajewski; editing by David Clarke)

FILED UNDER: