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Earnings at PGNiG surged in the 9 months of 2020, thanks to the impact of an arbitration award paid by Gazprom

Earnings at PGNiG surged in the 9 months of 2020, thanks to the impact of an arbitration award paid by Gazprom

Warsaw, November 19 - Neftegaz.RU. PGNiG's revenues from its own oil and gas production for the first 9 months of this year collapsed at PGNiG by 23%.

However, it was able to earn a record profit at the expense of Gazprom, which, according to the decision of the Stockholm arbitration, reduced gas prices for Poland and paid PGNiG compensation of $ 1.5 billion.

In the 9 months to September 30th 2020, PGNiG’s EBITDA came in at nearly PLN 10.7 billion ($ 2,78 billion).

The results of the PGNiG Group for the first 9 months of 2020 remain strong also if adjusted for the effect of impairment losses on property, plant and equipment and settlement of the overpayment for gas supplies under the Yamal contract following the favourable resolution of the arbitration proceedings against Gazprom. Excluding the effect of these, the PGNiG Group’s EBITDA would be PLN 5.5 billion ($ 1,4 billion), an increase of 32% year on year.

“What is of key importance to the PGNiG Group's financial performance in the coming quarters is the change of the pricing formula under the Yamal contract rather than the return of overpayment for gas supplied under that contract in previous years. Winning the arbitration proceedings has helped PGNiG to significantly improve its trading position by creating a stronger link between the costs of gas purchased east of Poland and gas prices in European markets. It is not the money returned by Gazprom that underlies the strength of our Group,” said Paweł Majewski, President of the PGNiG Management Board.

Currently, the annual gas consumption in Poland is about 19 billion m3. The raw material comes to Poland from Russia, USA, Qatar and Norway. More than 60% of Polish gas imports come from Russia.

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