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Segment’s figures

At the end of 2016, the Exploration and Production segment reported an operating profit of PLN 219m, a decrease of PLN 875m relative to 2015. At PLN 1,285m, EBITDA was also lower than the year before, by PLN 1,140m (47%). The segment’s revenue fell by PLN 564m (12%) year on year, to PLN 4,290m. The revenue decline reflected the 3% drop in oil sales volumes and lower crude oil prices (in Polish złoty terms, the average quarterly price of Brent in 2016 was approximately 12% lower than in 2015). Crude oil sales volumes were down in 2016, mainly as a result of longer scheduled maintenance shutdowns in Norway (in the third quarter) and unscheduled stoppages for repairs (in the fourth quarter). The PLN 311m increase in the Exploration and Production segment’s operating expenses (up 8%) was caused by higher impairment losses on non-current assets, which in 2016 amounted to PLN 771m, compared with PLN 555m a year earlier. The segment’s expenses were also affected by lower depreciation and amortisation charges, down from PLN 1,331m in 2015 to PLN 1,066m in 2016. The decline resulted mainly from the revaluation of reserves on the Norwegian Continental Shelf, which reduced depreciation rates applied to producing assets.