Notes to the Consolidated Financial Statements – Contents

28. Provisions

in PLN m

Provision for well decommissioning costs Provision for penalty imposed by the Office for Competition and Consumer Protection Provision for environmental liabilities Provision for claims under extra-contractual use of land Provision for liabilities associated with exploration work in Pakistan, Egypt and Libya Provision for the buy-out price on energy savings certificates – white certificates Other provisions Total
As at Jan 1 2013 1,661 60 94 77 28 - 222 2,142
Provisions recognised 68 - - 33 148 134 171 554
Provisions used / released (461) - (7) (29) (22) - (111) (630)
Currency translation differences (14) - - - (1) - (1) (16)
As at Dec 31 2013 1,254 60 87 81 153 134 281 2,050
Non-current 1,226 - 76 43 9 - 51 1,405
Current 28 60 11 38 144 134 230 645
As at Dec 31 2013 1,254 60 87 81 153 134 281 2,050
Non-current 1,636 - 85 24 10 - 37 1,792
Current 25 60 9 53 18 - 185 350
As at Dec 31 2012 1,661 60 94 77 28 - 222 2,142
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With respect to the costs of decommissioning of wells and site infrastructure located in Poland, in  2013 the discount rate applied to calculate the provision for decommissioning costs was 1.8%, as the resultant of the 4.35% rate of return on assets and the inflation rate assumed at the NBP’s continuous inflation target of 2.5% (as at the end of 2012, the discount rate was 1.2%, as the resultant of 3.73% and 2.5%, respectively).
At the end of 2013, PGNiG Upstream International AS, a subsidiary operating in Norway, applied the following rates to calculate the provision for production infrastructure decommissioning costs: inflation rate at 2% and nominal discount rate at 4.78%.

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