By developing oil and gas production and making efficient use of our infrastructure, we provide our Customers with environment-friendly energy, while building the Company’s value for our shareholders and employees.

Our vision is to grow from a guarantor of gas supplies into a profitable and competitive player on the hydrocarbon production and energy markets.

Our objective is to maintain EBITDA at current levels until 2017, and increase it to ca. PLN 7bn in 2022.

Deregulation in the present form creates a situation in which the PGNiG Group is responsible for Poland’s gas security, ensuring stable gas supplies to customers and handling import contracts, while also being forced to comply with the tariff model, which leads to high losses in the wholesale business, and also meet the requirement to sell a part of its gas volume through the power exchange, which drastically elevates the risk of losing a significant share of the market. Under this gas market deregulation model, the PGNiG Group bears the full cost of the process, which results in losses on its wholesale operations. These losses represent stranded costs and cannot be charged to end users.

The PGNiG Group must immediately take steps to overcome the threats to its operation on the domestic gas market. A failure to resolve the problems associated with long-term import contracts, regasification charges and the consequences of the exchange sale requirement may cripple the PGNiG Group’s financial strength.

Within this area, the PGNiG Group will seek to maintain its leading position on the gas market and remain the preferred gas supplier across all customer segments. The Group intends to pursue these objectives by developing and implementing mechanisms that would encourage customers to continue their relationship with PGNiG, and by transforming its sales model to improve customer service quality. The strategy of the PGNiG Group is to maintain a high stability of gas supplies to end users and to enhance the Group’s product offering through such initiatives as the launch of dual fuel products and the development of additional services. The priority in this area is to develop and implement mechanisms that would mitigate the risk related to the Company’s long-term gas import contracts. The Company will seek to introduce more flexibility into its natural gas portfolio and adjust the portfolio to the changing pricing and supply/trading conditions on the market, while maintaining its ability to ensure the security of supplies expected by customers.

Related initiatives:

The PGNiG Group’s grid infrastructure, gas storage, and electricity and heat generation assets are a source of predictable, stable revenue and deliver attractive rates of return relative to the risks. In the coming years, the assets will prove important in stabilising the Group’s financial performance and enhancing its ability to finance new projects. The role assigned to the infrastructure and generation area will call for ongoing cost control and the optimisation of capital expenditure. In a time of intense competition, it will be of paramount importance to ensure that this business area generates maximum free cash, particularly for new growth-oriented projects. Furthermore, new investment projects will have to be carefully selected to ensure that the Group’s potential and available synergies offered by new growth areas are fully leveraged. The Group will pursue new, profitable transmission infrastructure projects (heat networks) as one of its development directions.

Given the regulatory risks inherent in the PGNiG Group’s principal business, the implementation of the Group’s strategy requires dialogue with the regulator, decision-makers, representatives of the industry, and key stakeholders in the Company’s environment to minimise the negative impact of legislative solutions on the Group’s operations.

Related initiatives:

The development of the PGNiG Group should leverage its key competitive advantages and focus on the most prospective area of its operations. The competence and experience gained by the PGNiG Group in hydrocarbon exploration and production, and the increasing importance of access to a diversified portfolio of hydrocarbon deposits for fuel and energy companies to remain profitable, make the upstream segment the key driver of the Group’s further growth. However, if the confirmation of geological and economic potential of shale gas deposits in Poland will not result in a revolution on the hoped for scale, building a sustainable and profitable portfolio of production assets will require the PGNiG Group to pursue more exploration projects outside of Poland (also covering unconventional deposits).

A reasonable evaluation of the potential of domestic conventional deposits does not promise any discoveries that would markedly increase the PGNiG Group’s reserves in Poland and allow the Group to further expand production from domestic fields. The Group may only aspire to maintain its current levels of production. In order to be able to fully utilise our capabilities, which are unmatched by any competitors in Poland, and to ensure meaningful growth of the Company’s value, we must take active steps to consistently build a portfolio of foreign exploration and production assets.

PGNiG’s main objective is to maintain stable production of natural gas and crude oil in Poland. However, to secure further meaningful growth of shareholder value, the Company intends to take active steps to build a portfolio of foreign exploration and production assets.

The Company will also continue its efforts to confirm the geological and economic potential of shale gas deposits in Poland, within its most promising licence areas, with a view to verifying recoverable unconventional reserves and commencing economically-viable production of hydrocarbons in the shortest possible time.

Related initiatives:

The market deregulation, growing competitive pressures and the development of new business areas (international upstream, unconventional hydrocarbons and infrastructure) require the PGNiG Group to radically change its cost structure and focus on segments vital to its future. The PGNiG Group should improve its capacity to finance new investment projects and its liquidity, while sharpening its competitive edge based on increased operational efficiency.

The PGNiG Group’s staff must be perfectly prepared for changes in the Group’s environment.

To be able to face the challenges ahead, the PGNiG Group needs to build an efficient team of change promoters, to acquire and develop key competencies, and to make a great effort to engage the entire organisation in building a new project-based organisational culture fostering the effective management of resources.

To fully leverage Poland’s energy and resource potential, the PGNiG Group will have to optimally apply technology innovations developed in Poland or elsewhere in the world. Executing new, prospective projects may reposition our business so we can become a company whose competitive edge is based both on expertise and cost advantage.

To ensure further growth, the Group will take steps to improve its cost effectiveness and organisational efficiency at each stage of the value chain. These steps will include cost rationalisation at the PGNiG Group, necessary in light of market deregulation and growing competitive pressures, and the development of new operations (upstream and infrastructure). The Group will also focus on segments of key importance to its future. These measures will improve the Group’s ability to finance new projects and enhance its competitive position on the market.

To ensure the effective implementation of strategic initiatives, an efficient team of change leaders will be established, and the entire organisation will have to be engaged in creating a new objective-, efficiency- and project-oriented organisational culture.

Moreover, PGNiG is looking to assume a structured approach to R&D and innovation management, to obtain financing for its R&D projects from EU funds, and to optimise its portfolio of innovative projects.

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New strategic areas

The PGNiG Group’s companies conduct their business not only with the economic outcome in mind, but also with care for the process of achieving their objectives, taking into account the expectations and needs of stakeholders. That is why a comprehensive strategy of sustainable development and responsible business was implemented in 2009. It was formulated with active contribution from employees of all areas of the PGNiG Head Office and the PGNiG Group’s companies. Ever since then, we have published CSR reports and been included in the WSE’s Respect Index of socially responsible companies.

The Corporate Social Responsibility Strategy of the PGNiG Group, which harmoniously combines ethical and environmental aspects with business efficiency, is a blend of best practices in that area. By pursuing its sustainable development and responsible business strategy, PGNiG also fulfils its commitments resulting from membership in Global Compact, the UN’s international initiative. We are also an active member of the Responsible Business Forum.