• CLEAN AND ENVIRONMENTALLY FRIENDLY Natural gas is the cleanest and most environmentally friendly of all fossil fuels...Read more

  • WELL DRILLING PADThe size of a typical drilling pad is about 1 hectare. To compare, the floorage of an average shopping centre is 4.5 hectares... Read more

  • SECURING OF WELL DRILLING PADA drilling pad as well as the adjacent pool are reinforced and tightened with concrete slabs. Protective foil is additionally laid where necessary.

  • WORK NOISEWell drilling does not produce onerous noise. The intensity of sounds generated in connection with drilling work is lower than that generated by street traffic.Read more

  • SAFETY OF FRACTURING PROCESSIn Poland, exploration wells in shale rock are drilled to depths of over 2.5 km.Read more

  • COMPOSITION OF FRACTURING FLUIDFracturing fluid is 95% water. Read more

  • NO MAJOR LANDSCAPE INTERFERENCEIf gas production is launched, the land surrounding the isolated, secured zone, is subject to a reclamation treatment. Read more

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 dispute with the PBG Consortium Other provisions Total
As at Jan 1 2012 1,237  -  118 62 22 104 1,543
Provisions recognised 463 60 8 42  -  145 718
Transfers  -   -   -   -   -  -   - 
Provisions used / released (36)  -  (32) (27) (22) (33) (150)
Currency translation differences (3)  -   -   -   -  -  (3)
Changes in the Group  -   -   -   -   -  34 34
As at Dec 31 2012 1,661 60 94 77  -  250 2,142
Non-current  1,636  -  85 24  -  47 1,792
Current 25 60 9 53  -  203 350
As at Dec 31 2012 1,661 60 94 77  -  250 2,142
Non-current 1,223  -  103 12  -  20 1,358
Current 14  -  15 50 22 84 185
As at Dec 31 2011 1,237  -  118 62 22 104 1,543
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With respect to costs of abandonment of wells located in Poland, in 2012 the discount rate adopted to calculate the provision for well decommissioning costs was 1.2%, as the resultant of the 3.73% 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 2011, the adopted discount rate was 3.29%, as the resultant of 5.87% and 2.5%, respectively).

For the purpose of calculating its provision for well decommissioning costs as at the end of 2012, PGNiG Norway AS, which operates in Norway, adopted an inflation rate of PLN 1.47% and a nominal discount rate of 3.5% (end of 2011: 2% and 3.12%, respectively).

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