The Management Board of Polskie Górnictwo Naftowe i Gazownictwo SA (“PGNiG”) announces recognition, as at December 31st 2013, of an impairment loss on PGNiG’s interest in Polish Oil and Gas Company Libya BV (“POGC Libya”), a wholly-owned subsidiary of PGNiG, and creation of a provision for the outstanding licence obligations under the Murzuq project in Libya.
The recognition of the impairment loss for the entire interest in POGC Libya BV and all additional contributions to its equity, as well as the creation of the provision, follow from analysis of the project’s effectiveness, particularly:
i) reassessment of the estimates of hydrocarbon resources on the Libyan licence,
ii) assessment of future capital expenditure and operating costs on continued exploration work,
iii) changes in the project schedule,
iv) effects of the geopolitical situation in Libya and uncertainty concerning the extension of the licence, due to expire in September 2014.
The impairment loss and the provision recognised in PGNiG’s separate financial statements amount to PLN 420 million and PLN 137 million, respectively. Their impact on the PGNiG Group’s consolidated financial statements will be determined upon consolidation of accounting and financial data for the entire Group. PGNiG’s 2013 full year results will be published on March 5th 2014.
The PGNiG Management Board will decide on the future of the Libyan project once further economic and geological analyses have been completed.