Poland's biggest gas distributor PGNiG will start oil and gas exploration in eastern Germany, as part of a bigger plan to boost production assets outside Poland, PGNiG said.

The first of two planned wells is expected to be completed this year, said PGNiG, which will work with the German unit of Canadian firm Central European Petroleum (CEP) on the project.

PGNiG will spend more than 10 million euros ($10.95 million) on the project by mid-2016. Some 36 percent of the projects' revenues will go to PGNiG, 39 percent to CEP and 25 percent to Austria's Rohol-Aufsuchungs Aktiengesellschaft (RAG).

PGNiG compared the potential of the German deposit to one of its biggest deposits in western Poland - Lubiatow-Miedzychod-Grotow - which was initially estimated at around 7 million tonnes of oil.

In the first half of this year PGNiG's crude oil output was 704,000 tonnes, with half coming from its deposits outside Poland. ($1 = 0.9133 euros)