Polskie Górnictwo Naftowe i Gazownictwo S.A. (en: Polish Oil Mining and Gas Extraction S.A.) is a Polish state-controlled oil and gas company, headquartered in Warsaw, Poland. The Company has branches and representative offices in Russia, Pakistan, Belarus and Ukraine and holds equity interests in some 30 subsidiaries, including providers of specialist geophysical, drilling and well services.
|Traded as||WSE: PGN|
|Industry||Oil and gas|
|Piotr Woźniak (President)|
|Revenue||US$ 5.809 billion (June 2019) |
|US$ 430 million (June 2019)|
|US$ 336 million (June 2019)|
|Total assets||US$ 13.807 billion (June 2019)|
|Total equity||US$ 9.739 billion (June 2019)|
Foundation and early history (1976-1995)Edit
PGNiG was established as a state-owned enterprise on September 1, 1982. The company is a successor of the Union of Oil and Gas Mining, which was created by a merger of the Polish Union of Gas Industry and the Oil Industry Union in 1976.
Company development (1996-2012)Edit
In 1996, the company was transformed into a joint-stock company, owned by the state treasury. In 2004, PGNiG Przesyl Sp. z.o.o. (today OGP GAZ-SYSTEM S.A.) was established and became the first step in transforming the company's ownership structure. In 2005, PGNiG was listed on the Warsaw Stock Exchange.
In 2005, PGNiG signed a three-year contract with the government of Pakistan to explore in the Kirthar region, in a joint-venture with Pakistan Petroleum (30%). In the same year the company set up another joint-venture with German Verbundnetz Gas.
In 2007 and following years, PGNiG and Gazprom had various heated exchanges about pipeline operator EuRoPol Gaz, a Polish-Russian joint venture that operates the Yamal pipeline, after Gazprom had demanded an increase in shareholder rights. In the following year, Polish oil refiner Lotos and PGNiG signed a deal to jointly explore for Norwegian offshore oil.
In 2011, PGNiG purchased 99.8% of Vattenfall Heat Poland's assets for PLN 2.96bn, becoming the owner of Elektrociepłownia Warszawskie. In the same year, the company started large-scale exploration for possible shale-gas reserves in Poland. The first shale gas was produced from a well in northern Poland within the same year, and commercial production levels were expected to be reached by 2014. In discussions about the impact of shale-gas extraction (fracking), PGNiG officials stated, that regulation should happen on national levels and not be decided by institutions like the EU. In 2012, Poland granted 111 shale-gas exploration licenses.
In 2011, PGNiG was excluded from developing a gas field in Iran.
In 2012, Polish chemical company Tarnow announced to partner with PGNiG in building a 130 megawatts gas-fuelled heat and power plant.
At the end of 2012, one of the main investment projects for the development of natural gas and crude oil fields in the Lubiatów-Międzychód-Grotów region (LMG project) was completed. Test production had started in early August. The newly erected facilities and 14 wells were expected to produce around 100 million cubic metres of natural gas and 300,000 tonnes of crude oil, and together with another Norwegian project, doubled PGNiG's total oil production levels.
Poland and PGNiG had been following plans to reduce dependence on Russian gas for several years. Following the increase of costs for gas imports from Russia in 2012, the company announced a two-year plan to reduce costs and sell non-essential company assets, while also preparing for two subsidiary IPO's in 2013. The company also ended pricing negotiations with Gazprom in November 2012, agreeing to change a pricing-formula from contracts signed in 1996.
Recent history (2013-today)Edit
In September 2013, the consolidation of all gas companies within the PNGiG consortium into one company, under the name Polska Spółka Gazownictwa, was completed. In December 2013, PGNiG announced a cooperation with Chevron in order to scale-up their shale-gas operations faster.
On August 1, 2014, PGNiG OBRÓT DETALICZNY was separated from the current structure of PGNiG SA. Its establishment was dictated by legal conditions and the need to prepare for the upcoming full liberalisation of the gas market in Poland. As a result of the change, all retail customer service in the field of natural gas and electricity sales were transferred to the new company. Following these steps in deregulation of the Polish energy market, PGNiG was one of the first companies to directly trade on the nation's gas exchange. In 2014, as part of the political tensions between Russia and Ukraine, PGNiG reported a reduction of gas deliveries from Russia by 45%. As part of this reduction, PGNiG had to temporarily cut their gas exports to Ukraine.
In June 2016, the President Lech Kaczyński LNG Terminal received the first commercial cargo of liquefied natural gas under a commercial contract between PGNiG SA and Qatar's LNG producer Qatargas. Another LNG cargo was delivered from Norway's Statoil, totaling around 140,000 tons. In the same year PGNiG also filed a claim against Gazprom, seeking arbitration to further reduce gas prices.
In 2017, Qatargas signed a new LNG Sale and Purchase Agreement (SPA) with PGNiG, agreeing to deliver two million tonnes per annum (MTPA), starting on 1 January 2018 (until June 2034). The company also announced the first LNG delivery from the United States, which became the first LNG cargo shipment from the US Europe. In March of the same year, Polish energy firms PGNiG, PGE and Energa announced a total investment of $127 million into Poland's coal mining firm PGG. More than half of the investment came from PGNiG. The three companies had become PGG investors in the previous year. In 2017, PGNiG first signed a gas storage agreement with Ukraine's Ukrtransgaz, which was extended in 2018.
In December 2018, PGNiG won an exploration licence for blocks in the Emirate of Ras Al Khaimah, United Arab Emirates (UAE). For organizational and nonadministrative purposes, the company will establish a local office in the emirate.
As part of Poland's plans to become fully energy independent from Russia within the next years, Piotr Wozniak, president of the company, stated in February 2019: “The strategy of the company is just to forget about Eastern suppliers and especially about Gazprom.” In March 2020, the company stated that it will take steps to get the $1.5 billion it won in a pricing dispute case from Gazprom, a Russian gas supplier.
PGNiG is composed of various subsidiaries. As of 2017 the group included 20 direct and 14 indirect subsidiaries in the production, trade and service industries. The group also features a mutual insurance company,
PGNiG's chief governing body is the management board, which has five members. The board is led by president Piotr Woźniak. In January 2020, PGNiG appointed Jerzy Kwiecinski as new CEO and president of the management board. The other members are Jarosław Wróbel, vice president of the board, Przemysław Wacławski, vice president finance, Arkadiusz Sekściński, vice president development, Robert Perkowski, vice-president operational and Magdalena Zegarska, vice-president. Violetta Jaśkowiak serves as an authorized executive manager (procurator). The supervisory board has eight members and is led by chairman Bartłomiej Nowak and vice-chairman Piotr Sprzączak.
As of September 2019, PGNiG's shareholder structure is:
- 71.88% - State Treasury
- 28.12% - Free Float
PGNiG operates along the whole value-chain of oil and gas, including exploration and development, upstream production, transportation and downstream processing and delivery of the refined products to private and corporate customers. It 2008, the company supplied gas to 6.5 million customers. The largest of them were combined heat and power plants, steel mills and nitrogen plants.
The production and extraction of natural gas and crude oil throughout the country is handled by two main branches of the company - in Zielona Góra and in Sanok. The Zielona Góra Branch produces nitrogenous natural gas in 27 mines (17 gas and 10 oil-gas mines), while the high-methane gas is produced by the Sanok Branch and extracted in 47 mines (25 gas and 22 oil-gas mines). The produced nitrogen-rich gas is further processed into high-methane gas at the denitrification plant in Odolanów and at the newly built denitrification plant near Grodzisk Wielkopolski.
PGNiG has international operations in different countries. It has been active in the Middle East and Asia since the 1980s. In October 2018, PGNiG was one of several companies to not extend operations in Iran, following the reinstatement of U.S. sanctions.
PGNiG is the only producer of Helium in Central Europe.
Exploration and productionEdit
PGNiG's Exploration and Production segment reported an operating profit of PLN 2,805m for 2017. The company held a total of 213 production licences in Poland, produced 787,000 tonnes of oil and 3,839 mcm of high-methane and nitrogen-rich gas. Outside of Poland, PGNiG reported a total production of 698 mcm in combined gas and 470,000 tonnes of crude oil.
The company is also currently engaged in exploration activities in Pakistan, and minor activities in Libya and Iran.
Trade and storageEdit
PGNiG's trade and storage operations are in charge of the company's international natural gas trading business. The company operates seven underground gas storage facilities in Poland, that are located in Brzeźnica, Husów, Mogilno, Strachocina, Swarzów, Wierzchowice and Kosakowo. Since 2017, PGNiG also operates storage facilities in Ukraine, partnering with the local gas transmission operator Ukrtransgaz.
Awards and recognitionsEdit
In 2019, the PGNiG Annual Report received the award for “The Best Annual Report” in the category “Enterprises” from the Institute of Accounting and Taxes (IRiP).
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Media related to PGNiG at Wikimedia Commons