9. ORLEN Group structure and joint arrangements

9.1. ORGANIZATION OF THE GROUP

PKN ORLEN as the Parent Company is a multi-segment entity, appropriately allocated to all operating segments and corporate functions.

Name of entity Parent company Share in total voting rights Consolidation method/ Valuation method Website
    31/12/2015 31/12/2014    
Downstream Segment
ORLEN Lietuva Group
AB ORLEN Lietuva PKN ORLEN S.A. 100% 100% full www.orlenlietuva.lt
UAB Mazeikiu Naftos prekybos namai AB ORLEN Lietuva 100% 100% full  
OU ORLEN Eesti UAB Mezeikiu naftos prekybos namai 100% 100% full  
SIA ORLEN Latvija UAB Mezeikiu naftos prekybos namai 100% 100% full  
UAB Emas AB ORLEN Lietuva 100% 100% full  
UAB Paslaugos TAU AB ORLEN Lietuva - 100% full  
ANWIL Group
Anwil S.A. PKN ORLEN S.A. 100% 100% full www.anwil.pl
Spolana a.s. ANWIL S.A. 100% 100% full www.spolana.cz
RemWil Sp. z o.o. 3 ANWIL S.A. - 100% full www.remwil.pl
Przedsiebiorstwo Produkcyjno-Handlowo-Usługowe Pro-Lab Sp. z o.o. (in liquidation) ANWIL S.A. 99,99% 99,32% full www.prolab.pl
Przedsiębiorstwo Usług technicznych Wircom Sp. z o.o. ANWIL S.A. 97,38% - full  
Basell Orlen Polyolefins Group
Basell ORLEN Polyolefins Sp. z o.o. PKN ORLEN S.A. 50% 50% equity method www.basellorlen.pl
Basell ORLEN Polyolefins Sprzedaż Sp. z o.o. Basell ORLEN Polyolefins Sp. z.o.o. 100% 100% equity method  
UNIPETROL Group
PARAMO, a.s. UNIPETROL, a.s. 100% 100% full www.paramo.cz
MOGUL SLOVAKIA, s.r.o. PARAMO, a.s. 100% 100% full  
Paramo Oil, s.r.o. PARAMO, a.s. 100% 100% full  
UNIPETROL Austria HmbH (in liquidation) UNIPETROL, a.s. 100% 100% full  
UNIPETROL RPA, s.r.o. UNIPETROL, a.s. 100% 100% full www.unipetrolrpa.cz
UNIPETROL Slovensko, s.r.o. UNIPETROL RPA, s.r.o. 100% 100% full www.unipetrol.sk
UNIPETROL Deutschland GmbH UNIPETROL RPA, s.r.o. 100% 100% full www.unipetrol.de
UNIPETROL RPA Hungary Kft. UNIPETROL RPA, s.r.o. 100% - full  
CHEMOPETROL, a.s. UNIPETROL RPA, s.r.o. 100% 100% full  
Polymer Institute Brno s.r.o. UNIPETROL RPA, s.r.o. - 100% full  
UNIPETROL DOPRAVA, s.r.o. UNIPETROL RPA, s.r.o. 100% 100% full  
PETROTRANS, s.r.o. BENZINA, s.r.o. 100% 100% full www.petrotrans.cz
UNIPETROL RAFINÉRIE, s.r.o. UNIPETROL, a.s. 100% 100% full  
ČESKÁ RAFINÉRSKÁ, a.s. UNIPETROL, a.s. 100% 67,56% full* www.ceskarafinerska.cz
Butadien Kralupy a.s. UNIPETROL, a.s. 51% 51% share in assets and liabilities  
ORLEN Południe Group
ORLEN Południe S.A. PKN ORLEN S.A. 100% -    
Fabryka Parafin Naftowax
Sp. z o.o.1
RAFINERIA TRZEBINIA S.A.1 - 100% full  
Rafineria Nafty Jedlicze S.A.1 PKN ORLEN S.A. - 100% full  
Rafineria Trzebinia S.A.1 PKN ORLEN S.A. - 99,46% full www.rafineria-trzebinia.pl
EkoNaft Sp. z o.o. (in liquidation) ORLEN POŁUDNIE S.A. 100% 100% full www.ekonaft.pl
Energomedia Sp. z o.o. ORLEN POŁUDNIE S.A. 100% 100% full www.energomedia.pl
Euronaft Trzebinia Sp. z o.o. ORLEN POŁUDNIE S.A. 100% 100% full www.euronaft-trzebinia.pl
RAF- Służba Ratownicza Sp. z o.o. RAFINERIA NAFTY JEDLICZE S.A.1 - 100% full  
RAF-Koltrans Sp. z o.o. RAFINERIA NAFTY JEDLICZE S.A.1 - 100% full  
Zakładowa Straż Pożarna
Sp. z o.o.1
RAFINERIA TRZEBINIA S.A.1 - 100% full  
Konsorcjum Olejów Przepracowanych - Organizacja Odzysku S.A. ORLEN Południe S.A. 89% 81% full konsorcjum.jedlicze.com.pl
ORLEN Oil Group
ORLEN Oil Sp. z o.o. PKN ORLEN S.A. 100% 100% full www.orlenoil.pl
Platinum Oil Sp. z o.o.2 ORLEN OIL Sp. z o.o. - 100% full www.platinumoil.pl
Orlen Oil Cesko s.r.o. ORLEN OIL Sp. z o.o. - 100% full www.orlenoil.cz
ORLEN Asfalt Group
ORLEN Asfalt
Sp. z o.o.
PKN ORLEN S.A. 100% 100% full www.orlen-asfalt.pl
ORLEN Asfalt Ceska Republika s.r.o. ORLEN ASFALT
Sp. z o.o.
100% 100% full  
Inowrocławskie Kopalnie Soli "Solino" S.A. PKN ORLEN S.A. 100% 100% full www.solino.pl
Kopalnia Soli Lubień Sp. z o.o. PKN ORLEN S.A. 100% 100% full  
ORLEN Paliwa Sp. z o.o. PKN ORLEN S.A. 100% 100% full www.orlenpaliwa.com.pl
ORLEN Petrotank Sp. z o.o.5 PKN ORLEN S.A. - 100% full www.orlenpetrotank.pl
Ship-Service S.A. PKN ORLEN S.A. 60,86% 60,86% full www.ship-service.pl
Petrolot Sp. z o.o. PKN ORLEN S.A. 100% 100% full www.petrolot.pl
ORLEN KolTrans Sp. z o.o. PKN ORLEN S.A. 99,85% 99,85% full www.orlenkoltrans.pl
ORLEN Transport S.A.7 PKN ORLEN S.A. 100% 100% full www.orlentransport.pl
ORLEN Automatyka Sp. z o.o.3 PKN ORLEN S.A. - 100% full www.orlenautomatyka.pl
ORLEN Gaz Sp. z o.o.6 PKN ORLEN S.A. - 100% full  
ORLEN Eko Sp. z o.o. PKN ORLEN S.A. 100% 100% full www.orleneko.pl
ORLEN Wir Sp. z o.o. PKN ORLEN S.A. 76,59% 76,59% full www.orlenwir.pl
Baltic Power Sp. z o.o. PKN ORLEN S.A. 100% 100% full www.balticpower.eu
Baltic Spark Sp. z o.o.8 PKN ORLEN S.A. - 100% full  
Retail Segment
BENZINA, s.r.o. UNIPETROL, a.s. 100% 100% full  
AB Ventus-Nafta PKN ORLEN S.A. 100% 100% full  
ORLEN Deutschland GmbH PKN ORLEN S.A. 100% 100% full www.orlen-deutschland.de
ORLEN Budonaft Sp. z o.o. PKN ORLEN S.A. 100% 100% full www.budonaft.com.pl
ORLEN Centrum Serwisowe Sp. z o.o. PKN ORLEN S.A. 99,33% 99,33% full www.orlencs.pl
Upstream Segment
ORLEN Upstream Group
ORLEN Upstream
Sp. z o.o.
PKN ORLEN S.A. 100% 100% full www.orlenupstream.pl
ORLEN Upstream International BV ORLEN Upstream Sp. z o.o. 100% 100% full  
ORLEN Upstream Canada Ltd. ORLEN Upstream International BV 100% - full www.orlenupstream.ca
1426628 Alberta Ltd. ORLEN Upstream Canada Ltd. 100% 100% full  
OneEx Operations Partnership ORLEN Upstream Canada Ltd. 100% 100% full  
Kicking Horse Energy Inc. ORLEN Upstream Canada Ltd. 100% - full  
KCK Operating Company Ltd. Kicking Horse Energy Inc. 100% - full  
Columbia Natural Resources Canada Ltd. Kicking Horse Energy Inc. 100% - full  
Kicking Horse Internat. Exploration Ltd. Kicking Horse Energy Inc. 100% - full  
Pieridae Production GP Ltd Kicking Horse Energy Inc. 50% - equity method  
671519 NB Ltd Pieridae Production GP Ltd 50% - equity method  
KCK Atlantic Holdings Ltd. Kicking Horse Energy Inc. 100% - full  
Pieridae Production LP KCK Atlantic Holdings Ltd. 80% - equity method  
FX Energy, Inc. ORLEN Upstream Sp. z o.o. 100% - full  
FX Drilling Company, Inc. FX Energy, Inc. 100% - full  
FX Producing Company, Inc. FX Energy, Inc. 100% - full  
Frontier Exploration, Inc. FX Energy, Inc. 100% - full  
FX Energy Netherlands Partnership C.V. FX Energy, Inc. 100% - full  
FX Energy Netherlands B.V. FX Energy Netherlands Partnership C.V. 100% - full  
FX Energy Polska Sp. z o.o. FX Energy Netherlands Partnership C.V. 100% - full  
TriOilResources Ltd.4 ORLEN Upstream International BV - 100% full www.trioilresources.com
SIA Balin Energy OIEP Co BV - 50% share in assets and liabilities  
ORLEN International Exploration & Production Company BV ORLEN UPSTREAM Sp. z o.o. - 100% full  
Corporate Functions
AB ORLEN Lietuva PKN ORLEN S.A. 100% 100% full www.orlenlietuva.lt
ORLEN Administracja Sp. z o.o. PKN ORLEN S.A. 100% 100% full www.orlenadministracja.pl
ORLEN Capital AB PKN ORLEN S.A. 100% 100% full  
ORLEN Centrum Usług Korporacyjnych Sp. z o.o. PKN ORLEN S.A. 100% 100% full www.orlencuk.pl
ORLEN Finance AB PKN ORLEN S.A. 100% 100% full  
ORLEN Holding Malta Group
ORLEN Holding Malta Ltd. PKN ORLEN S.A. 100% 100% full  
Orlen Insurance Ltd. ORLEN HOLDING MALTA Ltd. 100% 100% full  
ORLEN Ochrona Group
ORLEN Ochrona Sp. z o.o. PKN ORLEN S.A. 100% 100% full www.orlenochrona.pl
UAB Apsauga ORLEN OCHRONA Sp. z o.o. 100% 100% full www.orlenapsauga.lt
ORLEN Serwis S.A. PKN ORLEN S.A. 100% 100% full  
UNIPETROL Group
UNIPETROL, a.s. PKN ORLEN S.A. 62,99% 62,99% full www.unipetrol.cz
UNIPETROL RPA, s.r.o. UNIPETROL, a.s. 100% 100% full www.unipetrolrpa.cz
UNIPETROL SERVICES, s.r.o. UNIPETROL, a.s. 100% 100% full  
Výzkumný ústav anorganické chemie, a.s. UNIPETROL, a.s. 100% 100% full  
HC Verva Litvinov, a.s. UNIPETROL RPA, s.r.o. 70,95% 70,95% full  
ORLEN Projekt S.A. PKN ORLEN S.A. 99,77% 99,77% full www.orlenprojekt.pl
ORLEN Laboratorium Sp. z o.o. PKN ORLEN S.A. 99,38% 99,38% full www.orlenlaboratorium.pl
Grupa Płocki Park Przemysłowo-Technologiczny
Płocki Park Przemysłowo-Technologiczny S.A. (PPPT S.A.) PKN ORLEN S.A. 50% 50% equity method www.pppt.pl
Centrum Edukacji Sp. z o.o. PPPT S.A. 69,43% 69,43% equity method www.centrumedukacji.pl

1) from 05.01.2015 ORLEN Południe S.A.
2) from 05.01.2015 ORLEN OIL Sp. z o.o
3) from 20.02.2015 ORLEN Serwis S.A.
4) from 10.03.2015 ORLEN Upstream Canada Ltd.
5) from 30.06.2015 ORLEN Paliwa Sp. z o.o.
6) from 30.10.2015 ORLEN Paliwa Sp. z o.o.
7) 29.02.2016 the company was sold
8) from 19.03.2015 Baltic Power Sp. z o.o.
* detailed in note 9.2.1

Activity of core companies belonging to ORLEN Group

Name of entity Headquarters Principal activity
UNIPETROL a.s.
(including its own Capital Group)
Czech Republic - Prague crude oil processing as well as manufacture and distribution of refinery, petrochemical and chemical products
AB ORLEN Lietuva
(including its own Capital Group)
Lithuania - Juodeikiai crude oil processing, production of refining products and wholesale
Anwil S.A.
(including its own Capital Group)
Poland - Włocławek production of nitrogen fertilizers, plastic and chemicals
ORLEN Upstream Sp. z o.o.
(including its own Capital Group)
Poland - Warsaw exploration and recognition of hydrocarbon deposits, extraction of crude oil and natural gas
ORLEN Oil Sp. z o.o. Poland - Cracow production, distribution and sale of grease oils, maintenance liquids
ORLEN Asfalt Sp. z o.o. Poland - Płock manufacture and sale of road bitumens and specific bitumen products
ORLEN Południe S.A. Poland - Trzebinia crude oil processing, production and sale of biofuels, oils
ORLEN Paliwa Sp. z o.o. Poland - Płock liquid fuels trade
Inowrocławskie Kopalnie Soli "SOLINO" S.A. Poland - Inowrocław storage of crude oil, fuels and gases, extraction and supply of brine

STRUCTURED ENTITIES

ORLEN Capital AB

The company’s business is raising funds through the issuance of bonds and other financial instruments for institutional and private investors. ORLEN Capital AB specializes in granting borrowings or loans to Group companies and conduct any other activities related to the financial instruments.

On 30 June 2014 ORLEN Capital AB and PKN ORLEN issued Eurobonds with 7-year redemption of approximately of PLN 2,080 million translated using exchange rate as at 30 June 2014 (representing EUR 500 million).The funds obtained by ORLEN Capital through the issue were transferred to PKN ORLEN under the borrowing agreement. PKN ORLEN is the guarantor of the issued bonds by an irrevocable and unconditional guarantee issued to the bondholders of PLN 4,262 million translated using exchange rate as at 31 December 2015 (equivalent of EUR 1 billion). The guarantee was granted for the time of the Eurobond issue, until 30 June 2021.

ORLEN Finance AB

The company’s business is to conduct financial services through transactions within the ORLEN Group, including intercompany borrowings and loans, as well as any other financial instruments.

As at 31 December 2015 the Group has issued the guarantee to ORLEN Finance of PLN 852 million.

Orlen Insurance Ltd.

Orlen Insurance is an internal insurance company (i.e. captive), which main purpose is insurance and reinsurance the Group's business, matching insurance to the individual needs of its property and the potential loss of margin.

9.2. SUBSIDARIES

9.2.1. Changes in shareholder structure affecting the financial data of the Group

Acquisition of shares

Acquisition of shares of Česká Rafinérská by Unipetrol

In the 1st quarter of 2014, Unipetrol a.s. acquired from Shell Overseas Investments BV (Shell) 152,701 shares of Česká Rafinérská representing 16.335% of this company share capital. The Group recognized a gain on the bargain purchase in other operating income of PLN 180 million, calculated as the difference between the acquired share in equity of Česká Rafinérská of PLN 262 million, and the purchase price of PLN 82 million. As a result of the transaction, Unipetrol’s a.s. share in the capital of Česká Rafinérská increased to 67.56 %.

On 3 July 2014 Unipetrol a.s. accepted the offer of an Italian ENI Holding regarding the acquisition of Česká Rafinérská shares, representing 32.445% of share capital of the company. On 19 December 2014 Unipetrol a.s received approval from the Czech Antimonopoly Office for conclusion of this transaction, however on 5 January 2015 an organization, among other of the united independent fuel station operators on the Czech market – SČS - Unie nezávislých petrolejářů, z.s. filed a complaint to this decision. On 30 March 2015 the Antimonopoly Office dismissed the appeal and declared the decision of 19 December 2014 to be valid.
On 30 April 2015 Unipetrol a.s. acquired from ENI 303,301 shares of Česká Rafinérská for the amount of PLN 97 million translated using the exchange rate as at 30 April 2015 (representing EUR 24 million).
As the result of the transaction, Unipetrol’s a.s. stake in Česká Rafinérská’s share capital increased from 67.555% to 100%. After settlement of the transaction, Unipetrol a.s. obtained control over Česká Rafinérská and started the full method of consolidation of the company. As a result of the settlement in the 2nd quarter of 2015, the Group recognized a gain on bargain purchase in other operating income in the amount of PLN 63 million.

  Carrying amount as at the acquisition day Adjustments to fair value Fair value
Non-current assets 338 (92) 246
Current assets 1 169 (15) 1 154
Assets (A) 1 507 (107) 1 400
Non-current liabilities 5 24 29
Current liabilities 870 8 878
Liabilities (B) 875 32 907
Identifiable net assets at fair value (A-B)     493
32.445% of net acquired assets in fair value     160
Fair value of transferred payment due to acquisition     (97)
Gain on bargain purchase     63
Acquisition of shares of Kicking Horse Energy Inc. by ORLEN Upstream Canada (a subsidiary of ORLEN Upstream)

On 12 October 2015 ORLEN Upstream Canada Ltd. (ORLEN Upstream Canada) signed an agreement to acquire Kicking Horse Energy Inc. (Kicking Horse) domiciled in Calgary, Canada.
Kicking Horse is company engaged in the exploration and extraction of oil and natural gas.
On 30 November 2015 Kicking Horse shareholders and option holders approved the acquisition of company shares by ORLEN Upstream Canada. On 1 December 2015 ORLEN Group acquired all of the outstanding common shares.
The transaction was financed through an increase of equity in ORLEN Upstream Canada (made by ORLEN Upstream Sp. z o.o.) as well as Kicking Horse available lines of credit.

The fair value of the identifiable assets and liabilities of Kicking Horse at the acquisition date:

  Carrying amount as at the acquisition day Adjustments to fair value Fair value
Exploration and evaluation of mineral resources assets 38 3 41
Assets related to development and extraction of mineral resources 668 474 1 142
Non-current financial assets 44 - 44
Trade and other receivables 26 - 26
Assets (A) 776 477 1 253
Provision for decommissioning costs of drillings and supporting infrastructure 14 - 14
Deferred tax liabilities 53 129 182
Other financial liabilities 196 - 196
Trade and other liabilities 31 - 31
Liabilities (B) 294 129 423
Identifiable net assets at fair value (A-B) 482 348 830
Fair value of transferred payment due to acquisition adjusted by transaction costs     (830)
Acquisition of shares of FX Energy Inc. by ORLEN Upstream

On 13 October 2015 ORLEN Upstream Sp. z o.o. (ORLEN Upstream) signed an agreement to acquire American company FX Energy, Inc. (FX Energy) domiciled in Salt Lake City, Utah, USA. FX Energy is engaged in the exploration and extraction of oil and natural gas mainly in Poland.
As a result, on 31 December 2015 ORLEN Group acquired 100% of the common shares and 100% of preferred shares of FX Energy. The transaction was approved by the Office of Competition and Consumer Protection. Financing of the transaction was provided from own resources of PKN ORLEN as well as available lines of credit.

The fair value of the identifiable assets and liabilities of FX Energy at the acquisition date:

  Carrying amount as at the acquisition day Adjustments to fair value Fair value
Exploration and evaluation of mineral resources assets 7 31 38
Assets related to development and extraction of mineral resources 175 379 554
Other property, plant and equipment 3 - 3
Cash and cash equivalents 30 - 30
Trade and other receivables 12 - 12
Assets (A) 227 410 637
Provision for decommissioning costs of drillings and supporting infrastructure 13 - 13
Deferred tax liabilities - 57 57
Loans 197 - 197
Trade and other liabilities 39 - 39
Liabilities (B) 249 57 306
Identifiable net assets at fair value (A-B) (22) 353 331
Fair value of transferred payment due to acquisition adjusted by transaction costs     (331)

In 2014, the main changes in the shareholder structure of the Group, besides the acquisition of shares in Česká Rafinérská as described above, related also to the acquisition of 100% of shares in Birchill Exploration Limited Partnership for the amount of PLN 707 million.
The settlement of executed transaction did not influence the consolidated statement of profit or loss and other comprehensive income, because fair value of net assets acquired was equal to price paid.

9.2.2. Other changes in the structure of the ORLEN Group

  • On 5 January 2015, a merger of Rafineria Trzebinia S.A. and the companies: Rafineria Nafty Jedlicze S.A., Fabryka Parafin Naftowax Sp. z o.o. and Zakładowa Straż Pożarna Sp. z o.o. took place. The company operates under the new name of ORLEN Południe S.A. since 5 January 2015;
  • On 5 January 2015, a merger of ORLEN OIL Sp. z o.o and Platinum Oil Sp. z o.o. took place;
  • On 22 January 2015 acquisition by PKN ORLEN from Anwil S.A. shares of Przedsiębiorstwo Inwestycyjno-Remontowe “RemWil” Sp. z o.o, domiciled in Włocławek took place;
  • On 20 February 2015 a merger of ORLEN Serwis S.A. with ORLEN Automatyka Sp. z o.o. and Przedsiębiorstwo Inwestycyjno-Remontowe RemWil Sp. z o.o. took place;
  • On 19 March 2015 a merger of Baltic Power and Baltic Spark took place;
  • On 1 June 2015 winding-up proceedings of EkoNaft Sp. z o.o. domiciled in Trzebinia began;
  • On 26 June 2015 winding-up proceedings of ORLEN International Exploration & Production Company BV due to closure of the exploration and extraction project on the Latvian shelf began;
  • On 30 June 2015 the District Court in Rzeszów made an entry of a merger of ORLEN PetroTank Sp. z o.o. and ORLEN Paliwa Sp. z o.o. into a single entity operating under the name ORLEN Paliwa Sp. z o.o. domiciled in Widełka. PKN ORLEN share in the share capital of ORLEN Paliwa Sp. z o.o. (formerly ORLEN PetroTank Sp. z o.o.) remained unchanged at 100%;
  • On 2 July 2015 winding-up procedures of the SIA Balin Energy terminated;
  • On 1 August 2015 winding-up proceedings of Pro-Lab Sp. z o.o. domiciled in Włocławek began;
  • On 1 October 2015 an increase in the share capital of ORLEN Upstream Sp. z o.o, which were fully subscribed by PKN ORLEN in exchange for a cash contribution of PLN 53 million took place. The proceeds from the capital increase will be earmarked for further exploration activity;
  • On 30 October 2015, a merger of ORLEN Gaz Sp. z o.o. and ORLEN Paliwa Sp. z o.o. took place;
  • On 18 November 2015 an increase in the share capital of ORLEN Upstream Sp. z o.o., which were fully subscribed by PKN ORLEN, in exchange for a cash contribution of PLN 1,501 million took place;
  • On 28 December 2015 deletion from the trade registry RAF-SŁUŻBA RATOWNICZA Sp. z o.o. in liquidation on 14 December 2015 took place;
  • On 1 January 2016 a merger of Kicking Horse Energy Inc., KCK Operating Company Ltd., Columbia Natural Resources Canada, Ltd. and Kicking Horse International Exploration Ltd. took place, in the next step merger with ORLEN Upstream Canada;
  • On 1 January 2016 a merger of Benzina and Unipetrol RPA took place and a merger of Mogul Slovakia and Unipetrol Slovensko took place;
  • On 29 February 2016 a merger of ORLEN Serwis S.A. with ORLEN Wir Sp. z o.o. and Przedsiębiorstwo Usług Technicznych Wircom Sp. z o.o. took place.

Changes in the Group structure are an element of the ORLEN Group strategy, assuming a focus on core activities and allocating the resulting available capital for development of the Group in the most prospective areas.

9.3. INVESTMENTS IN JOINT ARRANGEMENTS

  Place of business Principal activity Valuation method
joint ventures
Bassel ORLEN Polyolefines Sp. z o.o. (BOP) Płock production, distribution and sales of poliolefins equity method
Płocki Park Przemysłowo-Technologiczny (PPPT) Płock renting real estate equity method
Pieridae Production GP Ltd (ORLEN Upstream Group) Calgary exploration and extraction of minerals equity method
joint operations
Butadien Kralupy a.s. Kralupy nad Vltavou manufacturing of butadien share in assets and liabilities

In 2015 in accordance with IFRS 11 „Joint Arrangements” the ORLEN Group classified Unipetrol’s jointly controlled entity - Butadiene Kralupy, a.s. as joint operations.

Additionally, ORLEN Upstream has participated in the following joint operations:

  • participation in a holding founded by ORLEN Upstream, Polskie Górnictwo Naftowe i Gazownictwo (PGNIG), LOTOS Petrobaltic as business parties and as scientific parties University of Science and Technology (Akademia Górniczo-Hutnicza), Institue of Oil and Gas (Instytut Nafty i Gazu), Gdansk University of Technology, Warsaw University of Technology (Blue Gas – Polish Shale Gas program). The program aims to manufacture and commercialize the technology and gain knowledge for the extraction of shale gas in Poland. The Company participated in 6 projects carried out in 2013-2016. ORLEN Upstream’s total contribution to the implementation of these projects amounts to PLN 26 million. Until the end of 2015, the company donated to the Blue Gas program a cash contribution of PLN 3.8 million. In 2015, there were no costs incurred within the holding.
  • exploration – extraction projects carried out together with PGNiG (the search areas „Sieraków” – 49% share of ORLEN Upstream, “Bieszczady” – 49% share of ORLEN Upstream and through subsidiary FX Energy Poland the search areas “Płotki” – 49% share of FX Energy Poland and „Warszawa Południe” – 51% share of FX Energy Poland ). The agreements provide the conduct of joint operations and activities in the field of exploration, prospection and extraction of crude oil and natural gas. ORLEN Upstream and FX Energy Poland has the right to proportionate share of the income and bears a proportionate share in the costs of joint operations.

Investments accounted for under equity method

  31/12/2015 31/12/2014
joint ventures, incl.: 767 659
Bassel ORLEN Polyolefines Sp. z o.o. (BOP) 693 629
Associates 7 13
  774 672

Share in profit from investments accounted for under equity method

  2015 2014
joint ventures 252 55
Associates 1 2
  253 57

Condensed financial information of Bassel ORLEN Polyolefines Sp. z o.o.

  31/12/2015 31/12/2014
Non-current assets 874 960
Current assets 1 376 1 255
cash 394 233
other Current assets 982 1 022
Total assets 2 250 2 215
Total equity 1 415 1 287
Non-current liabilities 36 20
Current liabilities, incl.: 799 908
trade and other liabilities 783 845
Total liabilities 835 928
Total equity and liabilities 2 250 2 215
Net debt (393) (183)
Net assets 1 415 1 287
Group’s share in joint ventures (50%) 708 644
Consolidation adjustments (15) (15)
Joint ventures investments accounted for under equity method 693 629
  2015 2014
Sales revenues 3 895 3 477
Cost of sales, incl.: (3 136) (3 205)
depreciation and amortisation (101) (98)
Gross profit on sales 759 272
Distribution expenses (112) (94)
Administrative expenses (23) (23)
Other operating income and expenses, net 1 (7)
Profit from operations 625 148
Net finance income and costs 4 (3)
Profit before tax 629 145
Tax expense (120) (31)
Net profit 509 114
Items of other comprehensive income - 2
Total net comprehensive income 509 116
Net cash provided by operating activities 611 182
Net cash (used) in investing activities (17) (34)
Net cash (used) in financing activities (433) (287)
Dividends received from joint ventures 380 -
Net profit 509 114
Group’s share in joint ventures (50%) 255 57
Consolidation adjustments (3) -
Group’s share in result of joint ventures accounted for under equity method 252 57

In 2015 and in 2014, there were no significant restrictions in associates and joint ventures resulting from loans agreements, regulatory requirements and other contractual agreements that would restrict access to assets and settlement of liabilities of the Group.

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