PGNiG Upstream International (PUI) has signed a $400m loan agreement with eight banks to pay some of PUI’s outstanding debt.

It also includes the entire debt contracted to finance acquisition of assets from Total E&P Norge during 2014.

The seven-year deal was signed with banks, which comprise Societe Generale, BNP Paribas, ING, HSBC, Citibank, CACIB, SEB and Natixis.

With a grace period of 30 months, the revolving loan facility is expected to be one of the key components of PUI’s financing in the coming years.

PUI will have flexibility in planning its exploration and production activities using the facility, which would enable the company to freely purchase other production assets located on the Norwegian Continental Shelf.

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"PUI can proceed with its development plans for the two new oil and gas fields, Gina Krog and Snadd."

Using the funding, PUI can proceed with its development plans for the two new oil and gas fields, Gina Krog and Snadd.

The reserve-based loan formula of the facility would be secured on Norwegian assets and gives the company financial independence, while preventing its operations from weighing down directly on PGNiG’s Polish business.

According to PGNiG, the agreement will generate substantial savings in the group’s finance costs.

PUI will repay about PLN1.3bn ($346m) to PGNiG in August 2015.

By 2017, the aggregate transfer of funds from Norway to Poland is expected to exceed the nominal value of the investment in the Norwegian company, the company said.

Image: headquarters office in Warsaw. Photo: courtesy of PGNiG SA.