The update was prompted by significant developments on global markets, in particular the falling oil and gas prices. Operating in a fully competitive market, the PGNiG Group seeks to remain the leader in hydrocarbon exploration and production and the main supplier of natural gas, offering also heat and electricity.

The updated Strategy of the PGNiG Group for 2014-2022 was approved by the Supervisory Board on April 4th 2016.

The update was needed mainly to reflect significant changes in the macroeconomic environment. While the principal objectives of the Group are retained to ensure PGNiG remains the leading gas distributor in Poland, more emphasis is placed on diversification of imports. 'We seek to ensure that after 2022 consumers in Poland continue to have access to secure and affordable supplies of gas, on a par with those offered in Western Europe,' says Piotr Woźniak, President of the PGNiG Management Board.

More strategic initiatives

Following the Strategy update, new strategic initiatives will be implemented to help achieve the following targets and objectives:

  • EBITDA of approx. PLN 7.4bn in 2022. The higher EBITDA target is underpinned by larger ambitions in the area of transmission infrastructure (gas and heat distribution), acquisition of foreign exploration and production assets, and the Efficiency Improvement Programme.
  • Capital expenditure on organic growth and acquisitions maintained at PLN 40bn−50bn.
  • Hydrocarbon production in Poland and abroad to grow to approx. 55−60 million boe in 2022 (assuming that favourable market conditions supporting cost-effective acquisitions arise) and the annual production targets in Poland to continue at approx. 33 million boe.
  • Net debt to EBITDA ratio to stay below 2.0 in 2022 and the current dividend policy to be continued.

Updated Strategy: key elements

The update was driven by changed macroeconomic, market and business assumptions. Ultimately, the existing strategic initiatives were modified and new ones were developed.

The updated Strategy continues to focus on the following four key business areas:

  • Maintaining stable value of sales (both in retail and wholesale)
  • Maximising cash flows from the infrastructure and generation area over the long term
  • Strengthening and transforming the exploration and production area
  • Reinforcing the foundations for growth along the value chain.

The updated Strategy covers important new initiatives, involving:

  • Examination of new diversification projects
  • Assessment of feasibility of developing international LNG trading
  • Expansion of international sales activities of PGNiG Supply & Trading.

The following initiatives were modified:

  • Developing a new retail model, where more focus will be placed on actively defending the Group's market position
  • Expanding the upstream business outside Poland, where focus will be placed on higher production and greater cost efficiency of planned acquisition projects
  • Stepping up R&D activities, which will involve the application of specific technologies to obtain coal bed methane

PGNiG - Polish Oil & Gas Company published this content on 01 July 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 08 July 2016 11:45:06 UTC.

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