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ORLEN ORLEN Group 2017
Integrated Report

Our Capitals

GRI INDICATORS:
Capitals:

Financial capital

Financial resources that we currently hold or obtain in the course of our operations and from external sources.

Capital management

With its record-high results, full integration and enhanced efficiency of the operating segments, higher sales of products, launch of new services and investments in new business lines, the ORLEN Group has consolidated its position in the volatile market environment.

To ensure the efficiency of our operations, we use cash flows from operating activities, pursue ambitious investment plans and effectively use external financing to achieve our strategic goals.

Achievements

In 2017, record-high operating profit before depreciation/amortisation (EBITDA) of PLN 11.2bn translated into operating cash flows of PLN 8.1bn, enabling us to allocate PLN 3.9bn to investment projects, pay dividend of PLN 3 per share to the shareholders, and further reduce net debt, by PLN 2.6bn.


Free cash flow for 12M17 [PLNbn]

1 Mainly net effect of: income tax paid, elimination of profits of equity-accounted entities, exchange gains/(losses) from operating activities, interest paid, and payment of compensation at Unipetrol.

Operating segments’ LIFO-based EBITDA in 2017 [PLNbn]

Capital expenditure by markets and operating segment in 2017 [%]

Capital expenditure by markets and operating segment in 2017 [PLNbn]


 Dividend data:

  • Dividend paid for 2013: PLN 0.6bn / PLN 1.44 per share.
  • Dividend paid for 2014: PLN 0.7bn / PLN 1.65 per share.
  • Dividend paid for 2015: PLN 0.9bn / PLN 2.0 per share.
  • Dividend paid for 2016: PLN 1.3bn / PLN 3.0 per share

Net debt and net financial leverage

 


 

Support activities

Consistent implementation of strategic objectives for 2017–2021:

  • Integrated assets and value chain.
  • Strong market position and customer-oriented approach.
  • Cautious continuation strategy in the Upstream segment.
  • Safety and the environment.
  • Diversified sources of funding.
  • Dividend policy.
  • Innovations that create value.

Production capital

The ORLEN Group owns advanced and integrated production assets capable of refining over 35m tonnes of different crude grades annually, processing them into 50 refined and petrochemical products. Its products are marketed through the CEE region’s largest chain of nearly 2,800 modern service stations. As part of the efforts to develop its power business, the Group has completed a CCGT project in Włocławek and a similar project in Płock is scheduled for completion in 2018. In Upstream, the average 2017 daily output in Canada was 14,400 boe/d, of which 41% were liquid hydrocarbons (crude oil and condensate); domestic production was 1,200 boe/d (gas).


CONTRIBUTION


The ORLEN Group’s property, plant and equipment and intangible assets as at the end of 2017 was in excess of PLN 30bn.

  1. DOWNSTREAM
ORLEN Group production assets / processing capacity [million tonnes]:
 
  • X Maximum, annual processing capacity
Aktywne produkcje Grupy ORLEN
PRODUCTION
 
PKN ORLEN, Unipetrol, ORLEN Lietuva, ORLEN Południe Refinery
 
 
 
CCGT plants in Włocławek and Płock, CHP plants in Płock and other locations Power Generation
 
 
PKN ORLEN, Unipetrol, ANWIL and Basell ORLEN Polyolefins Petrochemicals
 
  • The total production capacities of the ORLEN Group refineries are 35.2m tonnes.
  • ORLEN Group’s refinery in Płock, a supersite refinery, is one of the most advanced integrated production facilities in Central and Eastern Europe, with an annual production capacity of 16.3m tonnes. In petrochemicals, the key unit (Olefins) has a maximum production capacity of about 700,000 tonnes of ethylene and about 380,000 tonnes of propylene. Monomers manufactured at PKN ORLEN are used as feedstock for the polymer units at Basell Orlen Polyolefins and the PVC unit at ANWIL. PKN ORLEN also operates a modern PX/PTA complex with an annual capacity of around 690,000 tonnes of terephthalic acid.
  • The other Polish refineries, operated by ORLEN Południe and located in Trzebinia and Jedlicze, specialise in the production of biocomponents, base oils, heating oil, hydrotreated paraffin as well as the regeneration of used oil.
  • The ORLEN Lietuva refinery in Mazeikai has an annual production capacity of 10.2m tonnes and is the only such facility in the Baltic States (Lithuania, Latvia and Estonia).
  • The Unipetrol Group operates refineries in Kralupy and Litvinov, with a combined annual production capacity of 8.7m tonnes. The Unipetrol Group also owns gas petrochemical assets with a combined annual production capacity of approximately 600,000 tonnes, including 320,000 tonnes of polyethylene and approximately 280,000 tonnes of polypropylene. Construction of a new polyethylene 3 unit, with an annual capacity of approximately 270,000 tonnes, is underway. Once completed, the unit will allow Unipetrol to increase the use of the Olefins installation and further integrate the petrochemical and refining operations.
  • ANWIL of Włocławek is the only Polish producer of polyvinyl chloride (PVC) and a major producer of fertilizers and sodium hydroxide in Poland. Its annual production capacities are approximately 1,160,000 tonnes of nitrogen fertilizers, 560,000 tonnes of PVC and granulates, and 360,000 tonnes of sodium hydroxide.
  • Basell ORLEN Polyolefins of Płock operates units whose combined production capacity reaches 820,000 tonnes (420,000 tonnes of polyethylene and 400,000 tonnes of polypropylene) and its products are distributed both domestically and on foreign markets.

ORLEN Group’s power generating assets:
 

Legend:
  •   Total electrical capacity [MWe]
  •   Total thermal capacity [MWt]
  •   CCGT unit in Włocławek
  •   CHP plants
  •   CCGT unit in Płock (Project in progress)
Aktywa energetyczne

Source: In-house analysis.

CHP plants:

  • In terms of installed capacity, PKN ORLEN’s high-efficiency combined heat and power plant in Płock is the largest industrial power plant in Poland and one of the largest in Europe. The CHP plant is the main supplier of steam heat, heating water and electricity to the Group’s production units in Płock and to external customers. The new 70 MW pass-out back-pressure turbine generator was placed in service in November 2017, and with a new TG7 turbogenerator in place, the total installed capacity increased to 415 MW. Boilers of the CHP plant are fired with heavy fuel oil derived from crude oil distillation and with natural gas.
  • The ORLEN Południe Group’s CHP plant in Trzebinia fully satisifies the Trzebinia plant’s demand for steam heat and heating water, and partly the demand for electricity. Fine coal is the primary fuel used by the CHP plant.
  • The ORLEN Południe Group’s CHP plant in Jedlicze, fired mainly with fine coal, is the main supplier of process steam to the Jedlicze plant.
  • At present, the Anwil CHP plant operates as an auxiliary source of heat and does not produce electricity. For technological purposes, Anwil uses mostly process steam from the Włocławek gas-fired CCGT unit (commissioned in mid-2017) owned by PKN ORLEN.
  • Unipetrol Group’s CHP plant in Litvínov uses lignite as the primary fuel; the plant’s power generation assets are currently being upgraded.
  • The CHP plant in Spolana is fuelled mainly with lignite.
  • The Paramo CHP plant comprises two production plants, in Kolin and in Pardubice, both fuelled with natural gas
  • ORLEN Lietuva’s CHP plant is a source of process steam and is fired mainly with heavy fuel oil and refinery gases.

CCGT plants:

  • 474 MWe CCGT unit in Włocławek. In 2017, it produced over 2.08 TWh of electricity and supplied almost 1,200,000 GJ of heat to Anwil in the form of process steam. The unit, which cogenerates electricity and heat, not only satisfies the ORLEN Group’s own demand for electricity, but has become an active market participant as well and closely cooperates with PSE, the national power grid. The relatively high installed capacity and high flexibility enable the unit to also provide system services to PSE, thus contributing to the grid’s stability.
  • 608 MWe CCGT unit in Płock. The unit was fired up on September 14th 2017, and on September 17th 2017 it was synchronised with the national grid. In November, the baseload reached approximately 600 MWe. In December, the first steam and electricity was supplied to the Płock production plant. By the end of 2017, the unit generated ca. 1 TWh of electricity.

ORLEN Group's logistics assets

The Group uses a network of The Group operates a network of complementary infrastructure assets: fuel terminals, onshore and offshore handling depots, transmission pipelines, rail transport, and transport by road tankers.

 
Crude oil and refined produt pipelines
 
Terminals
 
Railway
 
Road

ORLEN Group’s operational pipelines have a total length of 3,573 km including:

  • length of operational crude oil transmission pipelines – 1,695 km
  • length of operational refined products transmission pipelines – 2 058 km

The structure of transport in the ORLEN Group in 2017

  Poland Czech Republic Germany Lithuania
 
Pipelines
50% 40%    
 
Railway
27% 22% 4% 94%
 
Road
23% 38% 96% 6%

 

  1. RETAIL

The ORLEN Group is the undisputed leader in retail fuel sales in Central Europe, managing a network of 2,783 premium and economy service stations.

In Poland, our service stations operate under the ORLEN brand in the premium segment and under the Bliska brand in the economy segment. In the Czech Republic, we use the Benzina, Benzina Plus, Standard and Expres brands, and in Lithuania − the ORLEN brand (premium segment). On the German market, ORLEN Deutschland operates economy stations under the STAR brand and the network is complemented by more than a dozen of Familia supermarket stations.

RETAIL
SERVICE STATIONS

 
  UoM ORLEN Group Poland Germany Czech Republic Lithuania
Number of service stations, including: number 2,783 1,776 581 401 25
Premium number 1,867 1,665 - 179 23
Economy number 850 76 563 211 -
Other number 66 35 18 11 2

CODO/COCO

number 2,229 1,328 484 392 25

DOFO/DODO

number 554 448 97 9 -

FOOD
STORES

 
  UoM ORLEN Group Poland Germany Czech Republic Lithuania
Total, including: number 1,813 1,575 16 199 23
Stop Cafe number 1,126 960 - 143 23
Stop Cafe Bistro number 462 435 - 27 -
Stop Cafe 2.0 number 209 180 - 29 -
Star Connect number 16 - 16 - -

 

  1. UPSTREAM

At the end of 2017, the ORLEN Group held independently or with a partner (PGNiG) 26 licences in Poland, covering a total area of 18,700 km2 and spread over eight provinces, with 2P reserves of 11.5 mboe.The Group holds 100% interests in 13 licences and 49% interests in the other 13 licences. Average production in Poland in 2017 was 1,200 boe/d.

In Alberta, Canada, the ORLEN Group is a recognised operator and holds production assets covering a total area of 230,700 acres (900 km2), with total 2P reserves of 141.1 mboe. Average production in Canada in 2017 was 14,400 boe/d.

  UoM Canada Poland
Wells (net)1 number 11.5 6.0
Licences number - 26

1Adjusted for interests held by other entities.
2Including one well drilled by ORLEN Upstream under a mandate from PKN ORLEN.                                                          

ORLEN Group’s upstream projects in Poland
 
  •   100% interest held by the ORLEN Group
  •   49% interest held by the ORLEN Group (project operated jointly with a partner)
  • A Area/project name

POLAND

Projekty poszukiwawczo-wydobywcze

Source: In-house analysis.

Assets in Canada
  • A Project name
  • A Geological formation name

CANADA

Aktywa w Kanadzie

Source: In-house analysis.


RESULTS


  1. Downstream
Refinery capacity utilisation at the ORLEN Group

2017 –94%
2016 – 86%
White product yield

2017 – 78%
2016 – 78%
Olefins production capacity utilisation

2017 – 78%
2016 – 47%
PTA production capacity utilisation

2017 – 75%
2016 – 87%

Power Generation

  UoM Poland Czech Republic Lithuania
    2017 2016 2017 2016 2017 2016
Installed electrical capacity MWe 889.0 446,6 112.0 141.5 160.0 160.0
Installed thermal capacity MWt 2,567.0 2,721,5 766.0 1,399.1 1,040.0 1,040,4
Boiler efficiency % 93.0 93.0 88.8 89.5 92.0 91.7
Boiler availability % 91.6 84.2 75.5 76.4 90.5 90.1
  1. Retail
  • 84 new locations added to the retail chain,.
  • 2 hydrogen stations opened in Germany.
  UoM ORLEN Group Poland Germany Czech Republic Lithuania
    2017 2016 2017 2016 2017 2016 2017 2016 2017 2016
Total sale '000 tonnes 8,819 8,186,6 5,407 5,052,4 2,594 2,453,6 749.0 617.4 69.0 63.2
Market share % 15.3 17.7 34.0 34.8 6.1 6.0 21.1 17.8 4.5 3.5
  1. Upstream
  UoM Canada Poland
    2017 2016 2017 2016
Oil and gas reserves (2P) mln boe 141.1 102.5 11.5 11.3
Upstream mln boe per year 5.3 4.5 0.4 0.5
Average production tys. boe per day 14.4 12.2 1.2 1.4
Production structure (liquid/gas) % 41/59 43/57 -/100 10/90
  1. Capital expenditure

We increased our production capital in 2017 as follows:

(CAPEX) [PLNm]

 

Major investments projects carried out in 2017 included:

Downstream
 
  • Construction of CCGT units with related infrastructure in Włocławek and Płock.
  • Construction of a new polyethylene unit (PE3) in Litvínov.
  • Construction of a metathesis unit in Płock.
Retail
 
  • 89 new service stations opened (39 in Poland, 11 in Germany, and 39 in the Czech Republic).
  • 55 service stations upgraded and rebranded (23 in Poland and 32 in the Czech Republic).
  • 102 new Stop Cafe and O! SHOP stores opened.
Upstream
 
  • Canada: PLN 609m, Poland: PLN 169m.

PERFORMANCE MANAGEMENT


Main development investments in 2018:

Downstream
 
  • Construction of a polyethylene unit (PE3) in Litvinov.
  • Construction of a metathesis unit in Płock.
  • Construction of a PPF splitter unit in Lithuania.
  • Construction of a visbreaker unit in Płock.
  • Expansion of fertilizer production capacity at Anwil.
Retail
 
  • Expansion of the service station chain (40 new CODO stations).
  • Development of the Stop Cafe 2.0 food service format (more than 200 new catering outlets).
  • Launch of new services and products.
Upstream
 
  • Continued exploration and extraction work in Poland and Canada.
  • Capital expenditure: Canada – PLN 600m / Poland – PLN 200m.
 

CAPEX 2018 

Capital expenditure in 2018 by segment [PLNbn]

For more information, see the following sections:

Human capital

We transform our human capital with a view to enhancing our ability to meet current and future challenges as a cornerstone for success in the ever changing environment. Our priorities are to increase employee efficiency, develop employees’ knowledge, skills and abilities, promote cooperation in the workplace, improve leadership, maintain commitment to robust workplace safety standards and build a culture of innovation. Our top talents and modern organisational culture will help us continue on a growth path. Our strategy is strongly geared towards innovation that creates value.
 

  1. We operate effectively motivated by ORLEN’s core values


R

RESPONSIBILITY We respect our customers, shareholders, the natural environment and local communities


D

DEVELOPMENT We explore new development opportunities


P

PEOPLE Our assets are our competence, team spirit and integrity


E

ENERGY We work with passion


R

RELIABILITY We are a partner to rely on


  1. Modern management culture and friendly working environment
  • Our human potential management policy is underpinned by consistent efforts to build a team of seasoned specialists and to develop a support system for the managerial staff.
  • Our training programmes are focused on developing specialist competences and promoting the desired organisational culture, in particular with respect to the building of an engaging workplace and innovation.
  • We promote solutions that facilitate maintaining a good work-life balance.
  1. We care about workplace safety

The key areas of the safety management system at the ORLEN Group are:

  • Management and leadership.
  • Personal safety.
  • Process safety.
  • Commitment and responsibility.
  1. Building a culture of innovation
  • We create a knowledge-based organisation.
  • We unlock in-house potential.
  • We promote employee initiatives.

CONTRIBUTION


  • Over 20,000 dedicated staff making up a team of experienced specialists.
  • Personal development, an employee benefits system, diverse training opportunities, and a knowledge-sharing culture.
  • Maintaining the highest workplace safety standards, building the awareness of safe work procedures and creating proactive attitudes among our employees and contractors.
  • A base of over 17,000 suppliers.

RESULTS


  2017 2016
Workforce 20,262 19,730
Employee benefits [mln PLN] 2,391 2,206
TRR (Total Recordable Rate*) for employees and contractors 0.95 0.87

PERFORMANCE MANAGEMENT


Efficiency and safety

  • We work to adjust our HR and payroll solutions as well as IT systems so that they properly and effectively support business processes.
  • We believe in social dialogue based on independence of the parties, legal compliance, as well as trust, mutual willingness to compromise, and observance of the rules.
  • We ensure the highest safety standards in the operational areas of the Group.
  • We build awareness of a safe work environment and promote proactive attitudes among our staff and contractors.

Responding to challenges

  • We focus on the development of specialist competences among our staff that are aligned with the Group’s strategic goals, and we promote the desired organisational culture, in particular with respect to the building of an engaging workplace and innovation.
  • We build leadership through development of management skills in line with an approach that managers have the greatest influence on stimulating employee engagement at a company.
  • We implement modern solutions that facilitate maintaining a good work-life balance.
  • We have a recruitment policy in place whose aim is to attract top talent.

Culture of innovation

  • We run internal programmes for employees that provide a platform for sharing knowledge and experience in technological innovations and advances.
  • We promote employee initiatives in the field of innovation.
  • We forge partnerships with scientific and academic communities.

For more information, see the following sections:

Intellectual capital

Intellectual capital is the ORLEN Group’s strategic asset and a source of sustained competitive advantage. Employees’ knowledge and experience, customers’ trust, our values and rules of conduct contribute to building enterprise value in the short, medium and long time horizon.


CONTRIBUTION


Knowledge and unique experience – over 20,000 committed and highly qualified employees, including:

  • Outstanding technical and engineering staff with extensive experience in the refining, petrochemical and upstream sectors.
  • Experts in including, management, finance, HR, etc.
  • Experienced R&D team engaged in projects involving implementation of new products and technologies or projects conducted to ensure regulatory compliance.

R&D activities
Key development directions in R&D activities:

  • Next generation fuels.
  • Next generation polymers and materials.
  • Unconventional raw materials for the chemical sector.
  • New or improved processes, technologies and products.
  • Operational excellence and key technological processes.

Management systems – we are committed to ensuring best operating standards and the highest possible operational efficiency.

  • Our goal is to maintain the position of a quality leader on the Polish and international markets. We strive to strengthen customers’ trust in PKN ORLEN as a company that guarantees the highest quality, environmentally-friendly products, and timely supplies of the goods we manufacture and sell. We make an effort to consistently harmonise the methods of process planning and execution with the principles of stable and sustainable development by applying an integrated approach to the pollution prevention and environmental protection process.
  • These objectives are supported by our Integrated Management System, which consists of:
    - Quality Management System compliant with PN-EN ISO 9001, Quality Management System compliant with AQAP 2120, Environmental Management System compliant with PN-EN ISO 14001, Occupational Health and Safety Management System compliant with PN-N-18001, Information Security Management System compliant with PN-ISO/IEC 27001, Biomass and Biofuels Production Chain Certification System (ISCC EU), Factory Production Control System, HACCP Food Safety Management System based on the requirements of the Codex Alimentarius, Energy Management System compliant with ISO 50001 (implementation pending).

Due care policies and procedures for individual areas of our operations, ensuring the highest management standards.

Innovation culture – motivating staff to develop innovative technical and technological solutions by implementing projects and intranet platforms to promote innovative processes and knowledge management, including:

  • The Creator Programme – an IT system for managing optimisation and efficiency improvement initiatives, including initiatives that may become invention projects (inventions, utility designs, industrial designs, and integrated circuit topographies).
  • ‘Workshops with Innovation’, a series of meetings for employees that provide a platform for sharing knowledge and experience in technological innovations and advances.
  • Promotion of employee initiatives, including the ‘Innovative Project of the Year’ competition (the winning project in 2017 was: introduction of new EFECTA fuels in the Benzina service station chain in the Czech Republic.

Cooperation with scientific and research institutions:

  • Organisation of internships/work placements and recruitment of the best students and graduates.
  • Competitions for the best research papers and student theses.
  • ORLEN Knowledge Day, Case Week.
  • Innovation Day (workshops with scientific organisation,s devoted to the presentation of R&D and technological challenges faced by PKN ORLEN and projects run by universities/scientific institutes) and seminars.
  • Ordering of research, conceptual work, analyses and expert studies.

RESULTS


  1. Key R&D projects implemented in 2017:
  • Motor gasoline production technology and motor gasoline storage in salt caverns as an element in counteracting disturbances in the raw materials and product management (PKN ORLEN).
  • Monitoring of overall corrosion and hydriding with the use of an integrated system of dual corrosion sensors (PKN ORLEN).
  • Development of process technology for the co-hydrogenation of diesel oil fractions with vegetable oils as a potential source of biocomponents for diesel oil (PKN ORLEN).
  • Production technology for PVC-based ceramic composites (ANWIL).
  • Development of an innovative catalytic system with a dynamic and ordered structure for ethylene chlorination (ANWIL).
  • Development of an innovative catalytic system with a dynamic and ordered structure for ammonia synthesis reaction (ANWIL).
  • Biodegradable anti-caking agents for the fertilizers industry (ORLEN Południe).
  • Development of biotechnology-based conversion of renewable raw materials into lactic acid using microorganisms (ORLEN Południe).
  1. Key tasks implemented under the Integrated Management System and certificates received/maintained by the ORLEN Group – for more detailed information, see: Management rules/Due care policies and procedures.
  2. Annually, over 100 research and conceptual studies and designs, as well as over 10 student theses are prepared as a result of the cooperation between PKN ORLEN and university or college representatives.
  1. ORLEN brand value: PLN 3.9bn in 2016, and PLN 4.7bn (up 20%) in 2017.

PERFORMANCE MANAGEMENT


  • We engage in R&D projects to implement new products and technologies or ensure regulatory compliance.
  • We carry out internal projects designed to stimulate innovation among employees.
  • We implement modernisation and development projects by building interdisciplinary project teams at universities including PKN ORLEN’s representatives.
  • We provide the opportunity to submit innovative solutions in key areas of PKN ORLEN’s operations, i.e. fuels, petrochemicals, power generation, sales and hydrocarbon production – the proposals are analysed and reviewed by an internal expert team through relevant platforms, including the Creator Programme and innowacje@orlen.pl.
  • We ensure legal protection for projects giving rise to intellectual property rights that have been created at PKN ORLEN, including protection granted by relevant intellectual property protection agencies.
  • We run and participate in internship programmes: ‘Headed for ORLEN’ and ‘Energy for the Future’, which are an opportunity for students and graduates to learn about the specific nature of business activities and for the employer to get a fresh look from the outside.
  • We enable university and college students to prepare their theses on technological and business issues related to the ORLEN Group.
  • We participate in the Implementation Doctorates Programme funded by the Ministry of Science and Higher Education, in cooperation with the Warsaw University of Technology.
  • We carry out such projects as: ‘ORLEN Knowledge Day’, ‘Creative Project Semester’ at the Warsaw University of Technology, ‘Day with Energy’ at the Warsaw School of Economics, being practical workshops conducted by PKN ORLEN experts and complementing students’ theoretical knowledge.
  • We organise conferences and seminars in cooperation with universities (including the Warsaw University of Technology and AGH University of Science and Technology of Kraków).
  • Employees of our Power Generation Office take post-graduate studies at the Faculty of Power and Aeronautical Engineering of the Warsaw University of Technology.

For more detailed information, see the following sections:

Social capital

The social capital of the ORLEN Group relies on social connections and trust, both within the organisation and in relations with third parties.


 

CORE VALUES AND STANDARDS OF CONDUCT

  RESPONSIBILITY
  CHARITY
  REPORTING
  SPONSORSHIP

CONTRIBUTION


  1. Responsibility

Relations with local communities
We are an active and reliable partner of local communities. Most of our local CSR projects are pursued in communities where ORLEN carries on business, especially in Płock − the location of its registered office and largest production plant, but also in other regions where the ORLEN Group has operations or offices.

Collaboration with NGOs
Collaboration with non-governmental organisations, which supports closer and stronger dialogue between the public and private sectors.

CSR and sustainability projects
Key initiatives include: Partnership for Sustainable Development Goals in Poland, Global Compact, Fair Trade, Vision of Sustainable Development of Polish Businesses until 2050, Declaration of Compliance with the Code of Corporate Responsibility, and Declaration on Sustainable Development in the Polish Energy Sector.

Partnership with organisations and associations, including industry, expert and business organisations.

Supplier Code of Conduct
Striving to ensure sustainable development and responsible supply chain, the ORLEN Group incorporated the responsible business and sustainable growth criteria in its procurement management standard. Since 2016, compliance with the Supplier Code of Conduct is a mandatory criterion in selecting trading partners.

  1. Charity

Charitable giving policy
Its twin priorities are to improve the quality of life and health and promote education and youth development. The ORLEN Group provides help directly and indirectly, through its ORLEN GIFT FROM THE HEART Foundation, the UNIPETROL Foundation, and the ‘ANWIL for Włocławek’ Foundation.

Employee Volunteering Programme
As part of the programme, our employees initiate and support various CSR projects at the ORLEN Group with their knowledge, experience and work.

Fire Service Assistance Programme
We have always been concerned about the need to protect others from injury or death. Launched in 2000, the programme is aimed at improving general safety, promoting the right attitudes and conduct, and recognising the hard, life-saving work of firefighters.

  1. Sponsorhips

Sponsorship of projects supporting national culture and protecting the national heritage, educational projects, initiatives aiming to improve safety on Polish roads, initiatives related to national remembrance and tradition, promoting the Polish economy and popularising Poland on the international arena, efforts designed to counteract social exclusion and foster equal opportunities. Sponsoring sports events.

  1. Integrated reporting

Since 2015, ORLEN has been releasing integrated reports that present interactions and interrelations between the financial and non-financial aspects of the ORLEN Group’s activities. Integrated reporting is a way of communicating and an organisation’s communication tool which demonstrates how the organisation’s strategy, corporate governance and performance, in the context of its environment, allow it to create value in various time horizons.


RESULTS


  1. Local taxes paid by the ORLEN Group in selected locations [PLNbn]:
  2017 2016
PKN ORLEN (Płock) 233 166
ANWIL (Włocławek) more than 100 more than 120
IKS Solino (Inowrocław/Mogilno and other municipalities/rural communes) more than 10 more than 8
Unipetrol (Litvinov/ Most/Usti region in the Czech Republic) more than 9 4
  1. Number of social initiatives implemented with the active participation of customers, members of the VITAY loyalty programme - 2017: 16/2016: 11.

Examples include: ‘Fill Up with Prizes’ draw with reward points worth over PLN 1m to improve children’s safety;  reward points worth almost PLN 90,000 to help victims of storms and children living in family group homes; ‘Yes to Safety’ and ‘No to Smoke’ campaigns, with family group homes furnished with over 348 first aid kits and 314 smoke and carbon monoxide detectors;  ‘Slow Down Near Schools’ campaigns; ‘Safe Cycling’; ‘Ventilator for an Ambulance Transporting Newborns’; ‘Purchase of Road Rescue Equipment for Fire Fighters’.

  1. Marketing projects implemented for the benefit of Płock residents - 2017: 92/2016: 49.

Theatre shows for children and youth; the ‘What Musicals’ show; ORLEN Discovery Camp science picnic; ‘Addicted to Health – Smoke Free’ anti-smoking campaign; ‘Make Yourself Seen’ (reflectors for all primary schools in Płock); free swimming lessons for 100 Płock residents, including children and adults, ‘Holidaying with ORLEN’ (holiday play centres attended by more than 350 children); the ‘Light Schoolbag’ project, ‘What Musicals’ show by the Roma Theatre for 2,700 Płock residents; the ‘Tumski Fair’, the Vistula Folk Music Festival, ‘Rock Gardens’ rock festival; the Fame Dance Festival, the European Picnic, a horse riding tournament in Łącko, the ‘Rykowisko’ Ultramarathon, the Two-Bridge Half Marathon, ORLEN Handball Mini League.

  1. Charitable Giving Policy – ORLEN GIFT FROM THE HEART Foundation:
  • Number of partner family group homes: 350.
  • Number of children in care: 2,500.
  1. Events promoting healthy lifestyles and safety:
  • ORLEN Warsaw Marathon: 21,000 runners.
  • Fire Service Assistance Programme (run by PKN ORLEN, ANWIL, IKS Solino, and ORLEN Upstream): 169 fire brigades as beneficiaries.
  1. Employee volunteering projects:
  • Number of volunteering campaigns: 61.
  • Number of employees participating: more than 2,000.
  • Number of beneficiaries: more than 35,000.

PERFORMANCE MANAGEMENT


  • We strive to involve our customers in charity initiatives – since 2006, they have been offered an opportunity to donate VITAY points to charities.
  • We actively collaborate with local communities, particularly in Płock and other places where we operate (initiatives include the ‘ORLEN for Płock’ programme and cooperation with the ‘Grant Fund for Płock’ Foundation).
  • We promote sports and healthy lifestyles, supporting both professional athletes and the development of children and youth, who may become part of our national teams in the future (e.g. sponsorship of the Polish Olympic and Paralympic Committee, ORLEN Warsaw Marathon, ORLEN Team, athletics).
  • We sponsor cultural events and participate in projects that aim to protect national heritage (for instance, cooperation with the National Museum in Warsaw, the Fryderyk Chopin Institute, 42nd Gdynia Film Festival).
  • As a leader in the petrochemical industry, we apply our extensive expertise to promote education and knowledge of science, especially chemistry (‘For Eagles’, ‘Masters of Chemistry’ scholarship programmes).
  • One of the strategic areas of our social efforts are projects aiming to improve safety on Polish roads (the ‘ORLEN Safe Roads‘, ‘Make Yourself Seen’ and ‘Safe Journey to School’ programmes).
  • We are also active in promoting the Polish economy and popularising Poland on the international arena (‘Congress 590’, ‘Poland’s 200 Largest Companies’, ‘100% Polish’, ‘Poland’s Compass’).
  • We pursue a charitable giving policy which focuses on our role as a responsible employer, member of local community, good neighbour. Our charitable activities are cantered on two priorities: 1. ORLEN for life and health – supporting medical and professional institutions, healthcare facilities, professional and voluntary rescue services and entities working to improve road safety; 2. ORLEN for education and youth development – supporting educational and science initiatives, young talents, and foster families. The ORLEN Group provides help directly and indirectly, through its corporate ORLEN GIFT FROM THE HEART Foundation, the ‘ANWIL for Włocławek’ Foundation, and the Unipetrol Foundation.
  • Our marketing communications are designed to engage, and are based on emotional aspects that build close relationships with customers in line with the ‘Human to Human’ approach (the ‘Headed for ORLEN’ marketing platform).

For more information, see the following sections:

Natural capital

The ORLEN Group uses renewable and non-renewable natural resources in its operations. All our business activities are carried out in a responsible manner, with due consideration to the effects of current and future environmental impacts.

 
OIL AND GAS RESERVES
 
LAND ON WHICH PRODUCTION PLANTS ARE LOCATED
 
RENEWABLE AND NON-RENEWABLE FEEDSTOCK

CONTRIBUTION


Resources used in production processes:

  • Renewable − air, water, esters, bioethanol.
  • Non-renewable − crude oil, natural gas, auxiliary chemicals.
Non-renewable raw materials
  PKN ORLEN ORLEN Lietuva Unipetrol
Crude oil 15,219,558 9,820,529 7,894,288
Other 1,312,039 315,893 2,510,229
Renewable raw meterials
Biocomponents 810,499 52,719 269,580
  • We care to ensure our production processes are environmentally friendly. Most of our environmental projects carried out in 2017 involved adaptation of plant and process units to new environmental requirements and standards defined in the EU regulations and BAT Conclusions.
  • The production plants of the ORLEN Group in Poland, the Czech Republic and Lithuania are located on more than 1.7m ha of land.
  • The ORLEN Group has crude oil and natural gas (2P) reserves in Poland and Canada.
  • Production assets: as at the end of 2017, the ORLEN Group was the sole owner or a joint owner (with PGNiG) of 26 licences with a total area of 18,700 square kilometres in Poland, and held production assets spanning 230,700 acres of land (900 square kilometres) in Alberta, Canada.

RESULTS


  • In 2017, the ORLEN Group abstracted over 88m m3 of surface water, groundwater and mains water, compared with over 82m m3 in 2016.
    The amount of water abstracted from the environment depends on production demand.
  • The amount of effluents discharged to the environment by the ORLEN Group in 2017 exceeded 51m m3, compared with over 46m m3 in 2016.
    The year-on-year rise in the volume of effluents was due to the steam cracker at Unipetrol having been restored to normal operation and the CCGT unit in Włocławek having come on stream.
  • Total air emissions, including carbon dioxide, from the ORLEN Group reached over 15m Mg in 2017, compared with over 13 Mg in 2016.
  • In total, ORLEN Group companies generated close to 213,000 Mg of non-municipal waste in 2017, compared with 173,000 Mg in 2016.
    The increase in the amount of hazardous waste was due to a change in the methodology for estimating the weight of type 19 08 13* hydrated waste, which was previously reported as dry mass by ORLEN Lietuva. The increase also reflects a rise in oil throughput and fuel production rates.
  • Total spending on environmental protection projects by all ORLEN Group companies in 2017 amounted to over EUR 24.8m, compared with over EUR 22m in 2016.
  • ORLEN Group year-end 2017 2P reserves in Poland and Canada totalled 153 mboe, compared with year-end 2016 reserves of 114 mboe.

PERFORMANCE MANAGEMENT


  • We identify the environmental aspects of our technological processes, and we seek to minimise their impacts on the natural environment and human life and health.We comply with the requirements stipulated under integrated permits secured for our installations.
  • We effectively manage carbon emission allowances.
  • We implement investment projects to adapt process units to new environmental requirements and standards.
  • We ensure effective wastewater and waste management.
  • We effectively manage land remediation processes.
  • We engage in initiatives that promote environmental awareness and social responsibility.
  • We provide access to information on the environmental impact of our operations and on efforts taken to improve workplace health and safety standards and implement best practices of the Responsible Care Programme.

 



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