The PGNiG Capital Group is Poland's largest supplier of natural gas and a major player on the international energy market. As part of its new business strategy, the Group will attempt to maintain its leadership in the exploration sector and the status of the leading provider of natural gas who also supplies heat and electricity on a deregulated gas market. Energy resources are crucial in this process.

Natural gas and crude oil reserves in Poland are exploited by PGNiG branches in Zielona Góra and Sanok. The Zielona Góra facility extracts crude oil and nitrogen-enriched natural gas in 22 mines, whereas the branch in Sanok produces methane and nitrogen-enriched gas and crude oil in 37 mines.  

The Group is also present on foreign markets. Natural gas and crude oil reserves in Norway are exploited by PGNiG Upstream International AS. The company was incorporated in 2007 to manage the project on the Norwegian Continental Shelf and increase the Group's oil and gas production outside Poland. 

Most importantly, PGNiG Upstream International AS is an operator licensed by the Norwegian government. According to forecasts, the yield on the Norwegian market will reach 510,000 tons of crude oil and 0.4 billion m³ of natural gas in 2015.

PGNiG is also exploring hydrocarbon deposits in Pakistan as part of the exploration license for the Kithar block granted by the Pakistani government to the operator on 18 May 2005.

The volume of recoverable resources is estimated in accordance with the provisions of the Geological and Mining Law. The Regulation of the Ministry of Environment of 1 July 2015 identifies three categories of hydrocarbon reserves (natural gas and crude oil): A, B and C.

• In category C, the limits of a hydrocarbon deposit are determined based on the results of geophysical surveys and geological interpretations, and the resulting data are used to plan further operations to explore or manage the reserve, where the error of estimating average reserve and resource parameters cannot exceed 50%;
• In category B, the results of geological surveys are used to determine the geological structure of hydrocarbon deposits, their limits, parameters and variability, where the error of estimating average reserve and resource parameters cannot exceed 35%; 
• In category A, category B data are processed in view of exploration results, where the error of estimating average reserve and resource parameters cannot exceed 20%.

In each deposit, resources are explored based on data from at least one borehole where fossil flow is sufficient for industrial exploration and, in justified cases, based on the interpretation of geophysical data to determine the thickness and gas (oil) potential of the reserve.

The following types of crude oil and natural gas resources are identified in line with the Polish classification system:

• Mineral resources – total fossil volume within the limits of the explored reserve. Mineral resources are further subdivided into on-balance and off-balance resources:
• On-balance resources – resources that reach the boundary values of parameters describing the reserve;
• Off-balance resources – resources that do not reach the boundary values of parameters describing the reserve;
• Recoverable resources -  resources that can be recovered with the available technology.
• Economically feasible resources – the part of on-balance or off-balance resources within a planned mining area or its productive section whose recovery is technologically and economically justified upon the observance of environmental protection requirements;
• Non-economically feasible resources – the part of on-balance or off-balance resources whose recovery could be justified as the result of technological or economic changes or changes in environmental protection requirements.

PGNiG's Underground Gas Storage Facilities play a very important role in guaranteeing Poland's energy security, and they increase Poland's energy independence during peak demand for natural gas. Storage facilities guarantee uninterrupted gas supplies to Customers during increased demand for gas in winter. They stabilize gas reserves in the event of short-term gas outages, network failures or delivery limitations, and they contribute to the continuous and reliable operation of the gas transmission system (OGP GAZ-SYSTEM S.A.).

By relying on Underground Gas Storage Facilities, PGNiG is able to:

• maintain statutory natural gas reserves – pursuant to the provisions of the Act on the reserves of crude oil, oil products and natural gas, power companies that import natural gas for resale are under obligation to maintain gas reserves;
• optimize the natural gas supply chain,
• optimize the operation and development of the gas transmission system,
• optimize domestic production of natural gas,
• respond to sudden and short-lived changes in demand for natural gas,
• fulfill the obligations of take-or-pay contracts for gas imports.

The PGNiG Capital Group is particularly committed to the health and safety of its employees. We deeply believe that every employer has a duty to invest in workplace health and safety to prevent accidents, occupational diseases and serious industrial failures that could have catastrophic consequences for both the company and the local community.

In line with this philosophy, PGNiG continues to improve its systems for managing occupational health and safety. We implement protective and preventive measures by introducing group protection solutions, upgrading equipment and devices, renovating work premises, training employees about occupational safety, organizing regular medical check-ups for our staff and developing new procedures.

The Group relies on the latest achievements in science and technology to protect the health and lives of its employees, including the advancements made in ergonomics, sociology, psychology, occupational medicine and principles for emulating best practices.

Occupational health and safety committees (OHS Committees) are responsible for formulating opinions and providing advice concerning employee safety in the PGNiG Capital Group. The committees are composed in equal part of the employer's and the employees' representatives, including social work inspectors. The OHS committees comprise a total of 42 employer's representatives and 42 employees' representatives across the Capital Group. In line with the provisions of the Labor Code, the employees' representatives are selected by the  Company Trade Unions.

In 2014, the OHS Committees were present in 12 Capital Group companies: PGNiG SA Headquarters, PGNiG SA Branch in Sanok, PGNiG SA Branch in Zielona Góra, PGNiG SA Branch in Odolanów, PGNiG Obrót Detaliczny Sp. z o.o., PGNiG Termika SA, Geofizyka Kraków SA, Geofizyka Toruń SA, Exalo Drilling SA, PGNiG Technologie Sp. z o.o., Polska Spółka Gazownictwa Sp. z o.o. and Geovita Sp. z o.o.   

Preventive and protective measures are implemented in strict observance of legal provisions. In the power sector, occupational health and safety standards are set by basic regulations as well as the provisions of the Geological and Mining Law, Construction Law, Mining Rescue Act and legal acts relating to fire protection and environmental protection.

Workplace safety is also regulated by Council Directive No. 89/391/EEC on the introduction of measures to encourage improvements in the safety and health of workers at work. Its provisions apply to all areas of activity, both public and private, which require strict observance of occupational health and safety requirements.

In line with the provisions of Article 118a of the Treaty establishing the European Economic Community, Member States should pay particular attention to encouraging improvements, especially in the working environment, regarding the health and safety of workers.

The Group's ongoing commitment to occupational safety provides our employees with an optimal working environment that continues to be improved.  

The PGNiG Capital Group keep statistics relating to workplace accidents, absences, occupational diseases and other health and safety indicators in line with the provisions of Polish and EU laws. The data presented in this report cover employees hired under work contracts as well as other types of employment. The Group does not keep statistical data concerning accidents that involve its suppliers and subcontractors, and the relevant information can be obtained from their respective employers.

Occupational health and safety data is gathered according to the Regulation of the Council of Ministers of 2 September 1997 on occupational health and safety services (Journal of Laws of 1997, No. 109, item 704, as amended). The data is also reported to the Central Statistical Office.
 

The PGNiG Capital Group's commitment to occupational health and safety is not merely dictated by legal regulations. The Group is also eager to initiate such measures voluntarily, as demonstrated by its Health, Safety and Environment (HSE) system. The HSE system was implemented to protect the employees' health, provide employees with a safe working environment and protect the natural environment. The system not only facilitates the observance of the most stringent global requirements regarding the acquisition of new clients, but also enables the Group to improve its relations with foreign partners.

The HSE system has been implemented in seven branches:

• Branch in Sanok,
• Branch in Zielona Góra,
• Branch in Odolanów,
• Branch in Egypt (closed at the beginning of 2014),
• Branch in Pakistan,
• Geology and Exploration Branch in Warsaw,
• Borehole Mining Rescue Station in Kraków.

As part of the HSE policy, the Group places special emphasis on:

• safety of its employees, business partners, persons on the premises of Group facilities, and local communities,
• environmental protection,
• protection of PGNiG's property and image.

The safety measures and programs initiated as part of the HSE policy involve training courses which increase the employees' awareness of occupational hazards, work safety requirements, risk control and mitigation mechanisms.

We introduce various motivational activities during which our employees are evaluated for their involvement in the HSE scheme. Employees are awarded for initiatives that contribute to the development of the HSE system and encourage improvements in occupational safety.

Our employees participate in workstation training before potentially risky operations. We regularly update risk assessments in specific work posts, and we provide our staff with protective clothing and personal protective equipment. We control work facilities and we closely monitor the technical condition of machines and devices. Measurements of toxic and hazardous factors are conducted regularly.

PGNiG promotes workplace safety and fire protection by organizing knowledge competitions in the area of occupational health and safety, fire protection, medical rescue and environmental protection regulations. The Group's employees participate in mining and fire rescue field training taught by State Fire Service professionals.

The Group also encourages other improvements to actively protect employees against accidents at work and occupational diseases. PGNiG keeps detailed accident records which are scrupulously analyzed. The resulting observations are used to implement new solutions and continuously improve the system. In 2014, the results of such an analysis revealed a high number of accidents related to the maintenance of gas transmission networks and devices, vehicular traffic, office work, work in construction sites, as well as loading and unloading operations. These issues will be addressed at greater length and the relevant preventive measures will be introduced in 2015.

The above measures are implemented as part of the HSE system which is regularly monitored, and the results are reported to the Management Board PGNiG for continuous improvement.

In 2014, PGNiG began the process of implementing an integrated Quality, Health, Safety and Environment Management System (QHSE) in accordance with ISO 9001, 14001, OHSAS 18001 and HSE guidelines. The system will enable PGNiG's Management Board of to develop and implement a unified policy in the area of occupational health and safety. 

The QHSE system covers PGNiG SA Headquarters and seven branches. A Task Team and four sub-teams have been appointed to manage quality, environment, health and safety, and the HSE system. They are responsible for implementing the relevant processes and effective communication between the participating individuals and groups.

The teams will develop the QHSE policy and Process Maps with criteria for supervising process completion. Task Teams will also develop integrated system documents for the entire Group, including the QHSE System Log.

The implementation process will end with QHSE certification.