Who we are
We are the leading company in most sectors of the gas industry in Poland.
The core business of the PGNiG Capital Group is the search for and exploration of crude oil and natural gas deposits, storage of fuel gas, sale and distribution of natural gas, including upgrading and expansion of the gas distribution infrastructure.
Other areas of activity include the generation and sale of electricity and heat.
"To provide our Customers with environmentally-friendly energy and build the Company's value for shareholders and employees by developing oil and gas production and making efficient use of our infrastructure."
The PGNiG Capital Group explores oil and natural gas deposits in Poland, Norway, the Norwegian Continental Shelf and Pakistan.
The Group conducts geophysical and geological surveys and searches for new deposits in Uganda, Ethiopia, Pakistan, Kazakhstan, Egypt and Lithuania. In 2014, drilling operations were performed in Poland as well as in Kazakhstan, Pakistan and Ukraine.
Seismic field operations and geophysical surveys were carried out in Hungary, Germany, Slovakia, Serbia, Tunisia, Oman and Georgia. Seismic data were processed and interpreted in Pakistan, France, Yemen, Great Britain, Kenya and Cameroon. The PGNiG Capital Group delivered specialist borehole mining services in Romania, Lithuania, Ukraine and the Czech Republic.
The Group operates representative offices in Moscow (Russia), Brussels (Belgium), Kiev (Ukraine) and Vysokaye (Belarus).
The PGNiG Capital Group brings together commercial companies that specialize in production, trade and services. As at the end of 2014, the Capital Group was composed of PGNiG SA as the parent company and 30 subsidiaries, including 21 direct subsidiaries and 9 indirect subsidiaries.
A full list of members of the PGNiG Capital Group is available here.
PGNiG has the right to appoint the majority of its Supervisory Board members. PGNiG has 22.50% direct interest in B.S i P.G Gazoprojekt. 52.50% of Gazprojekt shares are held by PGNiG Technologie SA.
PGNiG SA is a joint-stock company. The State Treasury is the Company's majority shareholder with a 72.40% stake as at the end of 2014. Open pension funds also hold considerable interest in PGNiG SA. The majority of the Company's 10 largest institutional shareholders are Polish pension funds.
Governance structure of PGNiG SA:
PGNiG SA makes every attempt to systematically integrate environmental and social aspects in its business. The Company aspires to become a business leader and a CSR navigator in the power sector to effectively implement sustainable solutions and CSR initiatives. To achieve that goal, PGNiG SA has created dedicated units which coordinate CSR measures in all fields of activity.
PGNiG SA is highly committed to the observance of corporate governance principles. It makes every effort to foster positive relationships between investors, other stakeholder groups and the Company. Since 2009, PGNiG SA has been listed in the Respect Index, the only index of socially responsible businesses in this part of Europe. The 8th Respect Index was published in 2014.
The following bodies safeguard the observance of corporate governance principles in PGNiG:
Detailed information about the Company's governing bodies is available here.
The Company's strategy for 2014-2022 covers 4 key areas and 10 major development projects scheduled for completion by 2022. The main objectives are to raise EBITDA to approximately PLN 7 billion in 2022, achieve capital expenditure of PLN 40-50 billion by the end of 2022 and reduce the net debt-to-EBITDA ratio for 8 years below 2.0. According to plan, dividend payments will reach 50% of consolidated net profit beginning from 2015.
More about our strategy is available here.
Mariusz Zawisza was appointed President of the Management Board of PGNiG on 1 January 2014. Vice President for Trade Jerzy Kurella, Vice President for Finance Jarosław Bauc, Vice President for Exploration and Production Zbigniew Skrzypkiewicz, and Vice President for Corporate Affairs Andrzej Parafianowicz were also elected for a joint term of office.
In 2014, the Company's organizational structure underwent major changes. The existing branches of Gazobudowa, ZRUG and Naftomontaż were merged into a single Construction Branch. Work posts that were identical in the merged units were closed down, and managerial posts were reduced to a minimum. Those changes significantly improved efficiency in the consolidated organizational units.
Organizational changes were also introduced in Gazoprojekt in 2014. They key developments included structural transformations, changes in internal management and external representation (appointment of a new Management Board) and 10% employment reduction. Gazoprojekt opened an office in Warsaw (presently closed).
In 2014, a restructuring scheme was implemented in PGNiG Sales & Trading. In mid-2014, the Company's Management Board was replaced and reduced to 1 member. In August 2014, the number of branches was reduced from 7 to 4. Employment decreased from 55 to 40 by the end of 2014.
On 29 September 2014, PGNiG Upstream International AS acquired a stake in four oil and gas deposits in the Norwegian Continental Shelf (Morvin, Vilje, Vale, Gina Krogh). This move prompted the introduction of a new management system in 2014. The new assets had to be integrated with the remaining parts of the organization, which was accomplished through the introduction of new systems, procedures, insurance schemes, sales and financial models.
Geofizyka Kraków opened a branch in Oman and developed seismic projects for two new clients in 2014. Towards the end of that year, the Company decided to close the Oman office due to political instability in Libya and the resulting threat for the employees of POGC Libya B.V.
On 15 May 2014, the General Meeting of PGNiG decided to divide the net profit for the 2013 fiscal year and to pay out PLN 885 million in dividends to shareholders. Dividend per share is PLN 0.15.
Operator Systemu Magazynowania Sp. z o. o., PGNiG's storage system operator, began the process of increasing the working capacity of underground gas storage facilities in Wierzchowice and Strachocina.
PGNiG Obrót Detaliczny Sp. z o.o., the Company's retail business, began operations on 1 August 2014. The new enterprise took over PGNiG's natural gas business on the retail market.
Internal regulations concerning the selection of suppliers in PGNiG Technologie SA were amended pursuant to Regulation No. 44/2014 which came into effect on 4 September 2014.
The Central Measurement and Testing Laboratory of PGNiG SA launched training services.
PGNiG and Qatar Liquefied Gas Company Limited (3) signed an additional agreement to the contract for the sale of liquefied natural gas (LNG) of 29 June 2009. The agreement will minimize the risk of penalty for PGNiG's failure to purchase LNG in the amount stipulated in the take-or-pay contract.
The appointment of the new Management Board and the implementation of solutions for the four key growth areas defined by PGNiG Capital Group's new strategy create a wealth of new opportunities for the Group.
President Mariusz Zawisza, a highly qualified professional with considerable experience in managing large public service companies, including several electric power companies, will introduce a modern and expert-based management style that will guide the Company on the road to achieving its ambitious vision: "To guarantee reliable gas supplies, maintain operational efficiency and uphold a competitive advantage in hydrocarbon exploration and on the energy market".
The new Strategy of the PGNiG Capital Group for 2014-2022 sets clear directions for growth and introduces a more disciplined approach in the pursuit of the Company's strategic goals.
The strategy for 2014-2022 creates new prospects for growth, and the Company's low indebtedness is a good starting point for financing various types of activities, including the purchase of mining assets and dividend payments.
The additional agreement, drafted in late 2014, to the contract for the sale of liquefied natural gas concluded by PGNiG and Qatar Liquefied Gas Company Limited on 29 June 2009 is expected to improve PGNiG's financial performance in 2015 by lowering the cost of LNG purchases relative to the initial scenario detailed in the long-term contract.
The type of operations carried out by the PGNiG Capital Group are heavily burdened with risk. The Group continues to improve the tools and methods for risk identification and assessment. It is worth noting that the levels of operational, financial and market risk have been systematically reduced in comparison with previous years.
The key factors that exert a negative impact on the Company's performance are the risks associated with the liberalization of the natural gas market and long-term contracts. PGNiG currently faces 7 key risk areas. Most of them are closely related to the specific nature of the Company's business, but financial risks and labor market risks can also adversely influence PGNiG's operations.
PGNiG has implemented the "Policy of Financial Risk Management at PGNiG" which defines the division of competencies and tasks among the Company's organizational units in the process of managing and controlling financial risk. The Risk Committee regularly updates the Policy and monitors its observance in the Company. The Committee proposes risk management policies, assesses on an ongoing basis whether the Policy is implemented and revises it accordingly.
In 2011, PGNiG introduced a daily rate system for mining contractors to lower the cost of drilling operations and to minimize the risk associated with growing exploration costs.
PGNiG takes the following measures to mitigate the adverse consequences of unforeseen events:
- contractor and supplier risk – by incorporating suitable provisions in the concluded agreements (such as contractual penalties), working with the most qualified and reputable subcontractors;
- force majeure risk – by taking out insurance;
- technical risk – by rationally managing the explored deposits;
- project risk – by proposing alternative solutions regarding the project's location and the investment process, conducting negotiations, respecting deadlines, modifying schedules and work organization plans.
Detailed information about risk management in different fields of the Company's activity is available in the Annual Report of the PGNiG Capital Group for 2014 :