Polish Oil and Gas Company

Company Overview

March 2019 Agenda 1. PGNiG Group & Polish Gas Market

2. PGNiG Segments

Exploration and Production

Trade and Storage

Distribution

Generation

3. Strategy, CAPEX

4. Appendix Agenda

PGNiG Group and Polish Gas Market Poland’s no.1 integrated group in the oil and gas sector

4 3rd biggest Polish company on the Warsaw Stock Exchange**

The share price of PGNiG and WIG20 from January 2012 together with the rate of return Listed on WSE since September 2005 PLN rate of return 8,0 PGNiG WIG20 (relative rate) *** 80% Market cap, of PLN 40bn 7,0 (EUR 9.3bn, USD 10.6bn)* 60%

6,0 Significant share in WIG 20 40% based on number of shares in 5,0 20% the index: 5.36%

4,0 0%

3,0 -20%

2,0 -40% Q1'12 Q2'12 Q4'12 Q2'13 Q4'13 Q2'14 Q3'14 Q1'15 Q3'15 Q1'16 Q3'16 Q4'16 Q2'17 Q4'17 Q2'18 Q4'18 Market cap. of PGNiG from January 2017 together with the largest companies on the WSE

PGNIG PKN Orlen PZU PKO BP PGE SAN PL PEKAO Shareholders (as at December 31, 2018)

PLN bn 55 Free Float 28.12% PKO BP 49.3 Average daily 45 PKN Orlen 46.3 turnover in FY 2018: PGNiG 39.9 PLN 24.2m PZU 37.9 State Treasury 35 71.88% SAN PL 35.5

PEKAO 28.6 25

PGE 18.7 15 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18

* PGNiG = 6.91 PLN and EUR/PLN = 4.30; USD/PLN = 3.76 (as at December 28th 2018) ** in terms of market cap as at December 28th 2018 (without dividend) *** WIG20 quotation chart, taking into account relative changes in percentage in relation to the PGNiG exchange rate 5 Gas market in Poland: Low consumption with growth potential Natural gas sales by sector in the world Natural gas consumption by country in 2017 in 2016

bcm 2016 100 90.2 Non-combusted 5% 90

80 72.1 Transport 70 1% Buildings Inputs to 60 21% power 50 39%

40 29.8 32.0 30 19.1 20 11.9 Industry 8.4 9.0 9.9 10 33%

0 Czech Austria Hungary Romania Poland Ukraine Spain Italy Germany Republic Natural gas sales by sector by PGNiG in Poland in 2018 and 2017 Primary energy consumption by fuel in 2017 2018 100% 5% Others 3% 11% 16% Nuclear energy Power Plants 13% 15% 80% 12% 2%

Renewables 37% Residential and 24% 31% 2017 60% Commercial 35% Natural gas 49% 40% 38% Oil 48% 20% Coal Industry 48% 14% 0% EU Poland

Source: BP Statistical Review 2018, BP Energy Outlook 2018 / Gas consumption comprises sales, as well as in-house consumption and change of inventories 6 Gas market worldwide

Primary energy consumption by fuel Natural gas demand m t oil eq. 40% 5 000 Oil 4 707 4 426 4 148 Asia Pacific 4 000 3 861 30% 3 534 Africa Coal Oil 27% 3 204 Gas 26% 3 000 2 874 Middle East Gas Coal 21% 2 499 20% Europe & Eurasia 2 182 1 920 S & C America 2 000 1 767 Renewables 14% North America 10% 1 000 Hydro Hydro 7% Nuclear Nuclear 5%

Renewables 0% 0 1990 1995 2000 2005 2010 2016 2020 2025 2030 2035 2040 1990 1995 2000 2005 2010 2016 2020 2025 2030 2035 2040

Annual LNG supply by region Annual LNG demand by region m t m t 500 400 345 413 334 392 318 296 MENA* 400 361 North America 340 300 265 311 240 246 Latin America 279 284 Australia 300 Asia (without JKT) Other 200

200 North America MENA*

100 Europe 100 South Asia

Japan/Korea Africa /Taiwan 0 0 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020

* Middle East-North Africa / Source: IHS, BP Energy Outlook 2018 7 Exploration & Production

Agenda Operating segments Trade & Storage of PGNiG Group

Distribution

Generation PGNiG Group’s financials 2010-2018

PGNiG Group’s EBITDA** 5th biggest company in Central

PLNbn 7,1 and Eastern Europe* 6,6 3rd biggest oil company in the 6,4 6,0 5,6 6,1 region* 5,0 4,4 4,6 3,9 3,1 2,4 2,2 Stable EBITDA level due 3,5 3,4 to diversified inflows sources 1,2 2,0 0,6 0,6 1,0 0,8 1,9 0,5 0,2 2,3 2,6 2,5 2,4 2,0 2,3 1,7 1,6 1,6 -0,1 0,5 0,5 0,5 0,7 0,8 0,8 0,8 -0,4 -0,8 2010 2011 2012 2013 2014 2015 2016*** 2017*** 2018***

Heat and Power Generation Distribution Trade and Storage Expoloration and Production

EBITDA breakdown

PGNiG Group’s revenue and net profit 2018 Expoloration & PLNbn Production Trade & Storage Revenue 41,23 71% -12%

36,46 -7% 34,30 35,86 59% 32,12 33,20 2017 28,73 38%

23,00 21,28 13% Distribution 34% Generation 11%

Other segments’ contribution to EBITDA in 2018: -4%; in 2017: -3% Net profit 3,21 2,46 1,63 2,23 1,92 2,82 2,14 2,35 2,92

2010 2011 2012 2013 2014 2015 2016 2017 2018

* Source: TOP 500 CEE 2018 / ** EBITDA 2010-2015 before intra-group eliminations and excluding „Other segments” *** restated, other segments not presented on chart 9 Exploration & Production summary

Production volumes* PGNiG SA is a leader in production of gas and crude mm boe 50 oil in Poland

40,3 38,8 38,9 39,6 39,1 37,6 37,9 40 PGNiG’s resource base 4,9 3,9 2,1 3,1 4,2 3,5 3,4 30,9 31,3 31,4 in Poland**: 6,0 5,8 5,6 5,9 6,1 6,3 6,1 30 3,4 3,6 proved gas reserves 548 mm boe 3,7 2,4 3,1 4,0 3,7 4,5 4,8 4,5 (87.7 bcm)

20 proved oil reserves 119 mm boe (15.2 m tonnes) 27,2 27,9 27,8 27,2 26,0 25,8 25,0 24,8 24,6 25,1 10 Oil & Gas concessions 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019F in Poland**: Natural gas Poland Natural gas Abroad Crude oil and condensate Poland Crude oil and condensate Abroad 20 exploration/appraisal 27 combined licences 203 production Reserves of natural gas and crude oil mm boe Crude oil/NGL/Condensate Gas 1 000 Exploration & Production 854 860 847 858 805 796 795 768 770 activities: 800 54 production facilities in Poland

600 over 2 thousand producing wells 680 685 675 684 643 622 589 609 632 400

200

174 175 172 162 174 179 161 163 174 0 2010 2011 2012 2013 2014 2015 2016 2017 2018

*High-methane gas equivalent; **As at December 31st 2018 10 100 120 140 Exploration 0,0 1,0 2,0 3,0 4,0 5,0 Explorationand Average 20 40 60 80 0 USD/ Q1 PLNbn 77 * restated Q2 79 bbl 2010 2010 1,2 Q3 76 prices Q4 87 105 Q1 117 of of Q2 2011 Production’s 2011 1,9 113 crude Q3 109 Q4 119 Q1 oil 109 Q2 2012 2012 2,0 110 Q3 EBITDA 110 Q4 & 113 Q1 103 Q2 2013 2013 3,4 110 Production Q3 109 Q4 108 Q1 110 Q2 2014 2014 3,1 102 Q3 Q4 76 Q1 54 Q2 62 2015 2015 2,4 Q3 50 Q4 43 Q1 35 Q2 2016* 46 2016 2,2 v Q3 46 financial Q4 50 Q1 54 Q2 50 2017 2017 3,9 Q3 52 Q4 61 Q1 67 Q2 75 2018 2018 5,0 Q3 75 Q4 68 results Segment’s Segment’s PLNm PLNm sales recorded recorded sales bythe PLN condensate up PLN Revenue sold an increase in the volumes of oil higher prices of oil and gas Revenue Revenue Revenue +25% +27% 6,118

1,702 932 . 2,156 7,671 m results from sales from of crude and oil results yoy growth driven by Operating expenses Operating expenses increase in revenue from increase revenuein from gas - - 12%

-3,313 for FY2017 vs FY2018 -874 24% for for Q4 2017 vs Q4 2018

-1,080 -3,715 692 segment m EBITDA EBITDA yoy +30% 828 +30% 3,865 . 1,076 5,019 . +41% and EBIT EBIT 575 +37% 2,805 787 3,956 11 International E&P activities – Norway

Reserves in Norway (as at December 31st, 2018)

Natural Gas Crude Oil & NGL Total (mm boe) Skarv 12.4 8.5 20.9 Gina Krog 6.6 8.2 14.8 Vilje 3.7 3.7 Vale 0.7 0.6 1.3 Morvin 0.4 0.8 1.2 Tommeliten Alpha 36.1 18 54.1 Aerfugl 21.4 9.1 30.5 Skogul 0.3 2.9 3.2 Fogelberg 8.8 3.4 12.2 Total 86.7 55.2 141.9

Production in Norway On the Norwegian Continental Shelf, PGNiG UN, as a project partner, will mm boe Crude oil Natural gas continue to produce hydrocarbons from the Skarv, Morvin, Vilje, Vale, and 9,0 8,6 7,9 Gina Krog fields and will proceed with the development of the Skogul and 8,0 7,4 7,0 Ærfugl fields. 7,0 5,8 5,9 On October 18th 2018 PGNiG Upstream Norway AS signed agreement to 6,0 4,9 4,4 purchase 30% interest in license PL044 from Equinor Energy AS what is 4,1 3,4 5,0 4,3 equivalent to 42.38% interest in the Tommeliten Alpha field. The aggregate 4,0 3,1 3,3 resources corresponding to the interest purchased by PUN amount to approx. 52 mboe. The purchase price of the interest is USD 220 milion. 3,0 2,1

2,0 PGNiG also prepares a development plan for the Fogelberg field. 3,7 3,3 3,5 3,5 2,7 2,6 1,0 2,2

0,0 2013 2014 2015 2016 2017 2018 2019F

12 International E&P activities – Pakistan and other

Assets: Pakistan Other foreign activity in 2018

Seismic works: Acquisitions of seismic data: Bulgaria, Croatia, Egipt, Colombia, Tunisia, Ukraine, Myanmar. Processing and interpretation of seismic data: France, India, Pakistan, Colombia.

Licence Drilling works: Kirthar Main drilling areas: Pakistan, Kazakhstan, Ukraine agreement May 18th 2005 Libya Since 2008, one license for mining (LC113). shares PGNiG 70%, Pakistan Petroleum 30% In mid-2014, a force majeure notification. area 956 sq km In 2017 and 2018, activities limiting the location Sindh province, folded belt Kirthar impact of force majeure and verification of the prospects of the license. obligations 2 wells, 100 km 2D (fulfilled) UAE 9.4 bcm of natural gas In December 2018, acquisition of rights to estimated reserves (for PGNiG) (7.0 bcm Rehman, 2.4 bcm Rizq) explore for, to appraise and to produce hydrocarbons in Ras Al Khaimah Emirate.

In 2018 the Rizq-2 and Rehman-4 wells were brought on stream. PGNiG also completed drilling work on the Roshan-1 well. Currently, the drilling of the Rehman-5 well is being continued and equipment is being moved in and rigged up for the drilling of the Rehman-6 and Rizq-3 wells. In 2019, the Rizq-3, Rehman-5 and Rehman-6 wells are scheduled to come on stream. The Pakistan Branch is also planning to complete some seismic data acquisitions commenced in 2018 - the 3D seismic survey over the W1 prospect and the 2D seismic survey over the W2 prospect.

13 Gas supply & sales

Trade and Storage segment comprises: Sources of gas supply of PGNiG SA in Poland sales of natural gas (both imported and domestic) to retail and wholesale bcm markets, sales and trading of electricity 20 17,5 17,3 storage of gas 15,4 15,2 15,3 15,0 16 1,7 2,7 14,3 13,7 1,0 Polish market growth: CAGR +2.7% 2005-2017 1,6 2,0 13,3 2,3 1,0 2,1 0,3 1,8 1,6 1,2 Contract for natural gas deliveries with Gazprom („Yamal 12

9,0 9,3 9,0 10,2 9,7 contract”) until 2022: 8 8,7 8,1 8,2 9,0 10.2 bcm annually, 85% Take-or-Pay 4

Contract for LNG with Qatargas until 2034: 4,2 4,3 4,3 4,2 4,0 4,0 3,9 3,8 3,8 1.3 bcm annually, 100% Take-or-Pay. Deliveries since June 2016 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 side agreement (the total volume will increase to 2.7 bcm per annum, LNG Western/Southern direction Eastern direction Domestic production in 2018-2020 volume will be increased to 2.9 bcm) LNG Portfolio of PGNiG Group Contract for LNG with Cheniere until 2042: bcm 12 0.73 bcm in the period of 2019-2022 1.95 bcm annualy in the period of 2023-2042 10

Contracts for LNG with Venture Global and Port Arthur: 8 FOB

2.7 bcm annually each. Deliveries since 2022 (at the earliest) until 2043 6

3.9 bcm of gas sold by PGNiG Supply & Trading to 4 customers outside of Poland in 2018 2 DES Tariffs: 0 Gas sales: Cost of gas + operating costs + margin 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Qatargas Centrica Cheniere Spot transactions Venture Global LNG Port Arthur LNG Retail: PGNiG Retail’s cost base including cost of gas on the commodity exchange Storage: Cost + return on capital (6.1% WACC x PLN 3.5bn RAB) (since April 2019)

14 Trade & Storage’s financial results

Trade and Storage’s EBITDA Segment performance PLNbn 1,5 affected by increasing market prices of gas and crude oil. 1,0 1,0 Revenue from gas sales up PLN 4.9bn yoy. 0,8 Higher cost of gas in the segment due to 0,6 0,6 0,5 rising prices of crude oil and natural gas. 0,5 0,2 Segment’s results for FY 2017 vs FY 2018 0,0 PLNm -0,1 -0,4 +19% +20% -95% -62% -0,8

-0,5

32,741

-

31,704

27,180

26,540 - -1,0

2010 2011 2012 2013 2014 2015 2016* 2017 2018

435 640

- - 848

* restated - 1,037 Operating - Revenue EBITDA EBIT expenses

Segment’s results for Q4 2017 vs Q4 2018 Sales of natural gas of PGNiG SA, PGNiG Retail and PST PLNm

bcm 35 +22% +22% -42% -34% 29,1 30 26,8 24,7 3,9 25 23,0 2,2

2,5 8,783

-

10,732

-

10,382 - 18,7 2,3 8,538 20 8,5 8,8 16,2 1,8 9,1 8,3

15 1,4 3,7

245

349

-

397 296

0,1 - - 7,5 7,6 - Operating 10 8,6 Revenue EBITDA EBIT 7,7 7,3 6,9 expenses

5 8,6 8,8 6,2 5,5 5,1 6,1 0 2013 2014 2015 2016 2017 2018 PGNiG Supply & Trading Polish Power Exchange Retail Wholesale

15 15 Distribution

Stable network’s growth and increase of distributed volumes (+3.5% CAGR 2004-2018) The owner of approximately

thou. km bcm 97% of Poland’s distribution 220 13 network and nearly 99% of the 11,6 11,8 210 12 10,9 gas service lines.* 200 11 9,9 10,1 190 9,6 9,8 9,5 10 Transports natural gas from gas 180 186 183 9 sellers to households, industrial 180 170 177 173 8 and wholesale customers. 160 7 150 Responsible for operation, 6 140 148 150 maintenance and development 130 140 5 of gas pipelines. 120 4 '11 '12 '13 '14 '15 '16 '17 18 Segment comprises of Polska Distribution network with service lines(lhs, thou. km) Volume of distributed gas (rhs, bcm) Spółka Gazownictwa (PSG).

Coverage of distribution network Tariff: The new Tariff No. 7 approved by the President of the Energy Regulatory Office in January 2019 and has applied from February 15th 2019. Cost + return on capital (6.2% WACC x PLN 12.2bn RAB)

*As at December 31st 2017 16 1,00 1,10 1,20 1,30 1,40 1,50 1,60 1,70 1,80 1,90 Distribution’s 0,0 0,5 1,0 1,5 2,0 2,5 3,0 Segment’s Distribution’s PLNbn PLNbn 2010 2011 2,3 1,24 CAPEX EBITDA 2011 1,6 2012 1,14 2012 1,7 2013 1,34 2013 financial 1,6 2014 1,12 2014 2,0 2015 1,19 2015 2,3 results 2016 1,11 2016 2,6 2017 1,27 2017 2,5 2018 1,81 2018 2,4 Segment’s Segment’s PLNm PLNm cum. of cum. EBITDA PLN 16bn 2016in PSG’s from bylower tariff and net revenue Segment’s Revenue Revenue

1,242 - 4,937 7% strategic 1,156 4,927 balancing. results results Operating Operating expenses expenses performance affected +3% goal -713 -3,369 +3% for for for for FY2017 vs FY2018

-734 Q4 2017 -3,469 is to generate EBITDA EBITDA

529 - 2,493 - 20% vs 4% 422 2,385 Q4 Q4 2018 - 2022. - EBIT EBIT -

292 1,568 7% 37% 183 1,458 17 Heat and Power Generation

Share on the domestic market *: Generation segment operating data heat power 10% volume of heat sales 11% Installed heat power 5.3 GWt Share on the Warsaw market: largest producer of heat and electricity in cogeneration Installed electric power 1.0 Gwe estimated coverage of total heat demand about 70% estimated total electricity demand around 65% heat supplied to the city network about 98%. Heat sales in 2018 (regulated) 40.7 PJ Timeline: January 2012 – acquisition of 99.8% stake of Vattenfall Heat Poland Produced electricity sales in 2018 4.0 TWh S.A. from Vattenfall AB for PLN 3bn in cash (PLN 3.5bn EV) Acquisition of 20.4% of the share capital of the Polish Mining Group as a result of the investment of PLN 800m Production of heat and own generation electricity

Expansion of heat and power generation and distribution: PJ TWh

April 2016: purchase from JSW SA of Przedsiębiorstwo Energetyki 44 43,0 4,1 42,6 4,0 Cieplnej („PEC”) for PLN 190m, including 14 local heat plants, 260 4,0 MW of total heat output 42 40,7 3,9 40,2 3,8 August 2016: purchase from JSW SA of Spółka Energetyczna 39,5 3,9 40 39,0 3,8 „Jastrzębie” („SEJ”) for PLN 327m, including 5 CHP, 130 MW of 3,7 3,7 3,7 40,2 3,8 3,7 electricity output, 540 MW of heat output 38 3,7 3,6 38,7 38,7 September 2017: The merger of PGNiG TERMIKA EP 38,2 36,2 3,6 36 3,6 3,6 3,5 (formerly SEJ) and PEC 36,6 3,5 3,4 Tariff: 34 3,3 Heat tariffs benchmarking scheme creates significant upside for 32 3,2 profitability as PGNiG Termika produces low-cost heat 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Heat production (left axis) Electricity production (right axis)

* Source: Thermal energy in numbers 2016 18 0,0 0,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,9 Generation’s Investments Generation’s Combined 4 PLNbn * 2010 97 2010* 0,44 - 2011 according to Polish accounting standards; 2012 standards; accounting to Polish according 2011 expenditure Polska (PLN 900 specialised A commercial 2016 An contractor In Total Agreement 50 MWe / survey 50 January m agreement , EBITDA power 450 JV loan aligning Energia, 2011* gas 0,49 Heat PGNiG m related of for . agreement firm, operation 2016 output from - the fired Sale on ECSW’s and responsible totalling and : each to : project’s key 2012 cancellation 0,47 450 of the block Tauron and Electricity Power between preconditions lender MWe improper existing PLN current status for Polska in ) 2013 and 0,50 financial for 600 . - supporting of 2013 data before data intercompany before 2013 Plant ECSW Warsaw PGNiG execution commercial market 240 the m, the ended Energia for and MWt refinancing contract with Stalowa 2014 0,46 to the conditions its in PLN supply of . at Bank project Total coordination 2016 the agreements Ż 300 and contract era of 0 CAPEX . Gospodarstwa 2015 eliminations . 0,70 . 5 m Wola restructuring ECSW’s The impos bcm ń to results plant finance project . on of PLN to ition (Q gas an 2016 debt 0,76 the 4 1 EPCM ( of . for 6 20 will ECSW’s was Krajowego 2019 expected bn to penalties 14 20 PGNiG (project be signed basis years 2017 ) 0,84 ) resumed further start . and and finance) for in October general date PGNiG Tauron capital 2018 0,79 by of a Segment’s PLNm Segment’s materials prices electricity higher volumes, sales electricity higher include segment’s performance Key PLNm Revenue Revenue +14%

721 2,251 + 6 % 820 2,387 the to contributors results and results . Operating Operating expenses expenses +13% +11% -1,826

-480 for raw of cost higher for for

-533 -2,071 FY2017 vs FY2018 Q4 Q4 2017 EBITDA EBITDA 241 843 - +20% 7%

288 vs 788 Q4 Q4 2018 - - EBIT EBIT 26% 131 2% 425 129 316 19 Strategy, CAPEX PGNiG Group Strategy for 2017-2022

The new PGNiG Group Strategy for 2017–2022 (extended until 2026)

#1Mission statement #2 Vision #3 Primary objective We are a responsible and effective We are a trustworthy supplier of energy Increasing the PGNiG Group's value and provider of innovative for households and businesses ensuring its financial stability energy solutions

Trustworthy Responsible Value growth

The customers can depend on premium We act transparently, in line with the Our primary ambition is to create added quality and reliability of our services principles of corporate social responsibility value for our shareholders and customers

Energy supplier Effective Financial stability Our customers are offered a full range of We have implemented process and cost We seek to secure long-term financial stability energy products (gas + electricity + heat + optimisation measures and creditworthiness other/services) Households and businesses Innovative solutions

We care for and value all our customers: We are an innovation leader in the energy households, businesses, and institutions sector

21 The Group’s key strategic objectives

Strategic objective competitive position while supporting the development and ensuring security of the gas market in Poland

PGNiG's strong Development of gas competitive position market in Poland

Securing new gas supply More rapid expansion of sources to strengthen the Group's distribution network in order to competitive position following expiry of Paramount enable more new customer the Yamal contract in 2022 objective connections and gas market growth

Production projects in Norway Expanding the upstream focused on increasing annual gas business in Poland to replenish output to ca. 2.5 bcm from 2022 Increase hydrocarbon reserves and to maintain onwards the PGNiG Group's high levels of production value and ensuring its financial Significant improvement of Participation in the Norwegian stability customer service quality through Corridor project to secure direct digitalisation of service channels and gas imports from Norway expansion of the product portfolio expansion

Developing gas and LNG trading functions to make PGNiG more competitive on gas markets in Europe and in Poland

22 Ambitions in the key business areas

1. Exploration and 2. Wholesale 3. Retail production Increase the base of documented Diversified gas supply portfolio after 2022 Maximising retail margins hydrocarbon reserves by 35% (to Increasing the overall volume of natural Maintaining the total volume of retail 1,208 mm boe in 2022) gas sales by 7% (to 178 TWh in 2022) gas sales at ca. 67-69 TWh/year Increase annual hydrocarbon Cumulative natural gas sales volume on production by 41% (to 55 mm boe in wholesale markets in Poland and abroad 2022) 1000 TWh

4. Storage 5. Distribution 6. Power and heat generation Securing access to storage More than 300 thousand new service Increase power and heat sales capacities adjusted to actual lines in 2017–2022 volumes by 20% (to 18 TWh in 2022) demand The annual growth rate in the number of Improve storage efficiency service lines by 17% Increase gas distribution volume by 16% (to 12.3 bcm in 2022)

7. Corporate Centre

Effective execution of R&D&I projects Operational efficiency improvement across the PGNiG Group Enhancing the PGNiG Group's image

23 CAPEX and EBITDA for 2017-2022

CAPEX breakdown for 2017-2022 EBITDA for 2017 – 2022

PLNbn total: PLNbn

Exploration & 3,5 11,5 Production 45% 9.2 PLN 33.7bn cumulative

Distribution 3,1 6,9 EBITDA 29% Ambitious investment Power and heat 1,1 3,9 5.6 generation programme: Trade and 13% long-term growth of the storage 0,2 0,1 Group's EBITDA, particularly in Other growth 0,3 3,7 2023−2026 (at the annual projects 1% average of ca. PLN 9.2bn) 2017–2022 total 8,1 26,2 Keeping debt at safe levels 2017–2022 12% 5,7 2017−2022 annual 2023−2026 annual (net debt/EBITDA below 2.0) annual average average average more than CAPEX spent in 2017-2018 Plan for 2019-2022 PLN 34bn

Annual CAPEX 2012 – 2018 Almost half of CAPEX (45%) will be spent on

PLNbn Generation Distribution Trade & Storage Exploration & Production hydrocarbon exploration and production. 8,0 6,8 7,0 Average annual capital expenditure in 6,0 2017−2022 at ca. PLN 5.7bn. 4,7 5,0 3,2* 3,9 3,6 0,6 4,0 3,3 0,4 3,1 0,3 2,9 1,1 1,8 3,0 1,1 0,5 0,5 1,3 0,4 2,0 0,6 0,3 0,1 0,5 1,2 1,1 1,3 0,2 0,1 0,1 1,0 1,9 2,1 2,2 1,5 1,4 1,3 1,2 0,0 Dec 31 2012 Dec 31 2013 Dec 31 2014 Dec 31 2015 Dec 31 2016 Dec 31 2017 Dec 31 2018

* Includes PLN 3bn for acquisition of PGNiG Termika 24 Appendix Q4 2018 financial highlights

Group’s EBITDA by segment in Q4 2017 vs Q4 2018 [PLNm] Q4 2017 Q4 2018 D%

PLNm Revenue 10,908* 12,753 +17% 1300 Operating expenses (excl. D&A) 1,076 1100 -9,585* -11,406 +19% 900 828 EBITDA 1,323 1,347 +2% 700 529 EBITDA (net of impairment losses 500 422 1,872 1,574 -16% on property, plant and equipment) 241 288 300 Depreciation and amortisation -673 -751 +12% 100 1 expense -100 -83 EBIT 651 596 -8% -300 -245 -349 -500 Net finance income/(costs) -48 -14 +71% Q4'17 Q4'18 Q4'17 Q4'18 Q4'17 Q4'18 Q4'17 Q4'18 Q4'17 Q4'18

E&P T&S Distribution Generation Other Net profit 457 388 -15% *Data restated to ensure comparability following the adoption of amended IFRS 15. Exploration and Production Revenue from gas sales up PLN 294m yoy (+28%) and revenue from sales of crude and condensate up PLN 169m yoy (+34%). PGNiG Group’s EBITDA in Q4 2017 vs Q4 2018** Cost of dry wells and seismic surveys written off: PLN -146m (Q4 2017: PLN - PLNm 249m). 1 800 Trade and Storage 1 600 +248 +47 Revenue from gas sales up +24% and cost of gas up 31% yoy chiefly driven by 1 400 -104 -107 -60 rising oil and gas prices. 1 200 1,323 1,347

Gain/loss realised on hedging instruments designated for hedge accounting and 1 000 recognised in profit or loss: PLN +45m. 800 Effect of gas inventory write-downs higher by PLN -15m. In Q4 2017 gas inventory 600 write-downs increased by PLN -26m. 400 Distribution 200 Distribution volume up 4% yoy and revenue from distribution services down 4% yoy, 0 mainly due to lower tariff since March 1st 2018. Q4 2017 E&P T&S Distribution Generation Other and Q4 2018 Net income/cost of system balancing down PLN -79m yoy. Eliminations **Eliminations in Q4 2018: PLN -7m vs PLN -31m in Q4 2017 Generation Revenue from electricity sales up 31% yoy, driven by higher production volumes and rising electricity prices.

26 Operating expenses in Q4 2017 vs Q4 2018

[PLNm] Q4 2017 Q4 2018 D% Comments: PLN 2,019m (+31%) yoy increase in the cost of gas Cost of gas sold -6,512 -8,531 +31% sold, due to higher prices of oil and gas.

Fuels for heat and power generation -252 -314 +25% Lower yoy cost of dry wells and seismic surveys (PLN -146m). Eleven dry wells written off in Q4 2018 vs Other raw materials and consumables used -630 -437 -31% seven in Q4 2017 (PLN -152m). Recognition of impairment loss on non-current assets Employee benefits expense -794 -852 +7% of PLN -227m in Q4 2018 vs PLN -548m in Q4 2017. Yoy increase in depreciation and amortisation Transmission services -256* -262 +2% charges: PLN -751m in Q4 2018 vs PLN -673m in Q4 2017. Other services -542* -564 +4% Decline of other income/expenses in Q4 2018 yoy LNG regasification services -86 -93 +8% caused, among other factors, by an increase in gas inventory write-down in Q4 2018 by Taxes and charges -123 -112 -9% PLN -15m vs recognition of gas inventory write-down in Q4 2017 of PLN -26m. Recognition of an Other income and expenses** -64 -393 +6x impairment loss on receivables of PLN -76m in Q4 2018 vs reversal of an impairment loss of PLN +19m Change in inventory write-downs -34 -56 +65% in Q4 2017. Increase costs of other merchandise and materials to PLN -279m in Q4 2018 vs PLN -120m in Change in provisions 19 -79 -5x Q4 2017. Recognition and reversal of impairment losses on -797 -374 -53% Recognition of a provision for energy efficiency buy- property, plant and equipment and intangible assets out price: PLN -33m in Q4 2018 vs reversal of a Cost of dry wells and seismic surveys written-off -249 -146 -41% provision of PLN +16m in Q4 2017. Net exchange differences related to operating Impairment losses on non-current assets -548 -227 -59% activities: PLN -51m in Q4 2018 vs PLN -74m in Q4 2017. Work performed by the entity and capitalised 385 433 +12% Net gain/loss on derivative instruments recognised in net other income/expenses (not designated for hedge Depreciation and amortisation expense -673 -751 +12% accounting): PLN +183m in Q4 2018 vs PLN +72m in Total operating expenses -10,258 -12,157 +19% Q4 2017.

Operating expenses net of cost of gas sold -3,746 -3,626 -3%

* Data restated to ensure comparability following the adoption of amended IFRS 15. ** Other expenses shown above do not include taxes and charges, or impairment losses on property, plant and equipment and intangible assets. 27 Performance drivers

PLN weaker against USD and EUR, yoy 9-month average crude oil price up 39% yoy Revenue up on rising PLN in Q4 2018 USD/bbl 4,5 hydrocarbon prices 100 4.30 Rising unit cost of gas

4.23 +2% 80 +10% 67.73 4,0 61.43 3.77 60

3,5 3.60 +5% 51.98 +39% 72.31 40

3,0 20 07'16 10'16 01'17 04'17 06'17 09'17 12'17 03'18 06'18 09'18 12'18 07'16 10'16 01'17 04'17 06'17 09'17 12'17 03'18 06'18 09'18 12'18

Quarterly average USD/PLN exchange rate 3M moving average of Brent oil price in USD Quarterly average EUR/PLN exchange rate 9M moving average of Brent oil price in USD

Gas prices quoted on the POLPX Day-Ahead Market and the average price of contracts Comments: weighted by volume Selling prices at POLPX: the largest volumes of gas were traded on the POLPX and other PLN/MWh POLPX (Day-Ahead Market) gas exchanges under contracts with maturities of a quarter, season 160 Volume-weighted average price of contracts traded on POLPX (by delivery date) (summer/winter) and year. These were complemented by monthly/weekly futures and spot contracts. The volume-weighted average price of 91.02 103.36 83.96 contracts traded on the POLPX for a given 81.25 78.72 76.70 80 89.58 quarter is calculated based on the prices of 81.16 81.48 83.79 +23% (yoy) contracts for delivery in that quarter.

average price average price quoted on DAMg +27% yoy quoted on DAMg in Q4 in Q4 2017: 88.78 2018: 113.14 40 07'16 09'16 12'16 03'17 06'17 09'17 12'17 03'18 06'18 09'18 12'18

28 Gas sales and imports structure

Imports of natural gas to Poland Gas sales outside the PGNiG Group by company Growing share of LNG in total Q4 2018 imports, with seven gas LNG Eastern direction [mcm] Q4 2017 Q4 2018 D% tankers unloaded in Q4 2018, 26% 37% PGNiG Group: 8,022 8,583 +7% including four deliveries under 11% the contract with Qatargas 20% PGNiG SA 5,212 4,847 -7% and three spot cargoes. Q4 2017 PGNiG Group’s gas sales up 69% PGNiG OD 2,207 2,376 +8% 7% yoy. Increase in sales by PST (foreign operations). PST 603 1,360 +126% Western and southern direction 37%

PGNiG Group’s gas sales volumes, gas inventory levels, and gas imports

bcm 12,5

9.9 10,0 8.8 8.6 8.0 7.3 7,5 5.4 5.4 5.1 4.6 5,0 Comments: 3.8 3.2 3.3 3.5 3.7 3.4 3.3 3.0 2.9 LNG terminal stocks: 23 mcm after regasification (as at December 31st 2018). 2,5 2.9 3.0 2.2 1.7 2.3 2.1 2.3 0.9 1.1 0,0 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18

Gas inventory levels Volume of gas sold by PGNiG Group Volume of gas imported to Poland

29 Gas transport routes

Interconnections Northern Gate Project

POLAND – NORWAY (up to 10 bcm, 2022) POLAND – LITHUANIA (1.7/2.4 bcm, 2021)

LNG TERMINAL (I stage – 5 bcm, planned II stage TETEROVKA – 7.5 bcm) (0.2 bcm*)

YAMAL MALLNOW Włocławek YAMAL KONDRATKI PIPELINE Lwówek PIPELINE (reverse : technical (30.7 bcm*) capacity up to do 5.4 bcm*) VYSOKOYE (5.5 bcm*)

GCP (1.5 bcm*) POLAND – UKRAINE (5 bcm, 2020)

POLAND – CZECH REP, DROZDOVITSE/ (6.5/5 bcm, 2019) HERMANOWICE CIESZYN, (4.4 bcm*) (0.5 bcm) POLAND – SLOVAKIA (5.7/4.7 bcm, 2020)

Existing interconnectors LNG TERMINAL Interconnectors planned, under construction (transmission capacity into/from Polish grid)

* Technical capacity 30 Gas trading and retail sales

Sales by PGNiG SA 7.0 bcm of gas sold in 2017 7.4 bcm of gas sold in 2018 Production Exports 0.7 bcm in 2017 PGNiG S.A. 0.5 bcm in 2018 Direct sales Sources of gas 0.8 bcm in 2017 0.9 bcm in 2018 Polish Power Exchange 8.5 bcm in 2017 8.8 bcm in 2018

Polish Power Exchange PGNiG Obrót Sales by PGNiG OD 7.5 bcm of gas sold in 2017 (POLPX) Detaliczny 7.6 bcm of gas sold in 2018

Sales made on POLPX by PGNiG SA and purchases made on POLPX by PGNiG Obrót Detaliczny, which commenced operations on August 1st 2014, are not subject to elimination from the consolidated financial statements, and are disclosed under the Trade and Storage segment.

31 Changes on the Polish gas market

Gas sales volume (mcm) 2014 2015 2016 2017 2018 Gas market deregulation is affecting PGNiG's share in Total PGNiG Group 18.6 23.0 24.3 26.8 29.0 imports and sales structure PGNiG SA (with Eksport, without Pakistan) 13.8 13.2 14.5 16.8 17.0 Since August 1st 2014, the PGNiG Group's including PGNiG SA through PPE 3.7 8.1 9.0 8.4 8.5 gas sales volumes have included both PGNiG SA's sales through the exchange and PGNiG Obrót Detaliczny 3.0 7.5 7.3 7.6 7.9 PGNiG OD's sales to end customers and on the exchange. Nitrogen-rich gas presented in the table as Group E gas equivalent.

* Notes: The chart presents PGNiG SA's share in gas flowing into Poland through OGP Gaz- PGNiG's share in gas imports to Poland* System's entry points (excluding transit volumes via the Yamal pipeline and including

100% volumes for export), monthly data The increase of PGNiG's share in imports observed in Q1 2016 caused mainly by 80% reduced exports to Ukraine. Data in the chart do not show PGNiG SA's

share in the Polish gas market, % 60% %

They have been sourced from reports

84

94

: : : :

7 published by OGP Gaz-System on the 1

40% volumes of gas flowing through Q4’18 Q4’ interconnectors.

20%

0% 01'14 04'14 06'14 09'14 12'14 03'15 06'15 09'15 12'15 03'16 06'16 09'16 12'16 03'17 06'17 09'17 12'17 03'18 06'18 09'18 12'18

32 Tariff Model in Poland

Type of activity Regulatory mechanism Monthly average gas prices in European import contracts and PGNiG tariff price Direct sales None PLN / ths. cm 2000 Gas sales Cost of gas + operating costs + margin 1600 PGNiG Retail’s cost base including cost of gas on Retail PPE Including cost of imports + cost of production (with 1200 Wholesale return on capital invested in E&P) Storage Cost + return on capital 800 (since April 2019) (6.1% WACC x PLN 3.5bn RAB) Distribution (since Cost + return on capital 400 February 2019) BAFA price Russian gas at German border (6.2% WACC x PLN 12.2bn RAB) PGNiG Selling Price (Industrial tariff) 0 Detariffication schedule for gas market in Poland Jan.11 Jun.11 Nov.11 Apr.12 Sep.12 Feb.13 Jul.13 Dec.13 May.14 Oct.14 Mar.15 Aug.15 Jan.16 Jun.16 Nov.16 Apr.17 Levels of obligatory trading on Polish Power Exchange

Until January 1 October 1 the end 2017 2017 of 2023 30% 40% 55% max Eliminating gas fuel Eliminating gas fuel Maintained the trading tariffs for trading tariffs for other obligation of providing wholesalers and end business customers tariffs for households. In 2013 From January 1, 2014 From January 1, 2015 customers purchasing (including both bigger gas fuel (i) at a virtual industrial companies gas trading point, (ii) in and small & medium Liberalization of gas market in Poland is being implemented, based on the form of LNG or CNG, enterprises). obligatory trading on gas exchange in Warsaw and gradual removal of and (iii) under tender, tariffs for certain segments of industrial customers. auction or public procurement procedures pursuant to the provisions of the Public Procurement Law.

33 Debt and sources of funding Comments: On December 21st 2017, due to a mismatch Sources of funding (as at December 31st 2018) between its investment programme and the PLNm PLN 1.5bn bond programme of July 4th 2012, PGNiG TERMIKA entered into agreements available used terminating the bond programme. As a result, the total value of guaranteed bonds reached PLN 7bn. On December 21st 2017, PGNiG S.A. signed a 4,700 PLN 5bn bond programme agreement.

Dividend per share for financial year 5,000 PLN

270 0,30 2,300 1,000 1,010 0.19 0.20 0.20 0.17 0.18 Underwritten bonds (programme Domestic bonds (December 2022) BGK programme (2024) Reserve Based Loan (2022) 0,20 0.15 0.15 valid until 2020) 0.12 0.13 0.090.08 Debt at quarter end 0,10 0.07* PLNbn

10 0,00 Debt Net debt 05 06 07 08 09 10 11 12 13 14 15 16 17 18 8 Strategic objective: up to 50% of consolidated 6.4 net profit to be distributed as dividend in 6 2015−2022 (provided that the financial 3.8 3.7 condition is stable and financing for investment 4 3.0 projects is secured). 2.2 2 1.1 1.3 1.4 0.5 0.7 0.7 0.4 -0.2 *On October 29th 2018, a decision was made 0 to pay an interim dividend of PLN 0.07 per Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 share from the Company’s 2018 profit. The -2 -1.4 dividend record day was November 26th 2018, -1.5 -1.6 -2.0 -2.4 and the dividend was paid on December 3rd -4 2018.

34 Statement of financial position, statement of cash flows, financial ratios and workforce Group’s statement of financial position (as at December 31st 2018) Workforce (as at December 31st 2018)* PLNm Non-current Current Equity 40 Other segments Generation Distribution Trade & Storage Exploration & Production

31.0 29.0 14.373 30 2.0 1.1 1.6 25.5 25.3 24.7 24.8 36,632 1.1 1.3 1.9 1.1 1.8 1.5 13.1 1.9 1.8 1.8 38 898 20 12.2 9,384 10.7 11.6 10.8 11.1 7 255 4.1 3.9 Assets Equity and liabilities 10 3.5 2.9 3.0 3.1 Profitability and liquidity ratios 10.8 10.2 8.9 7.7 7.0 6.8 9,4% 0 10% 8,7% 8,8% Dec 31 2013 Dec 31 2014 Dec 31 2015 Dec 31 2016 Dec 31 2017 Dec 31 2018 7,3% 8% 6,9%

6% Consolidated cash flows (Jan 1st − Dec 31st 2018) 5,8% 6,1% 6,0% 4% 4,7% PLNm 4,3% 10 000 2% 278 1,060 626 0% 2,720 2014 2015 2016 2017 2018 8 000 4,704 ROE ROA

3 2.4 6 000 2.2 1.8 1.8 4,502 2 237 1.4 4 000 2.0 1.6 1 1.4 1.3 1.2 2 000 3,928 2,581 0 2014 2015 2016 2017 2018 Current ratio Quick ratio 0 Cash (Jan 1, Profit before Depreciation Income tax Other Change at the Investing CF Financing CF Cash (Dec 31, 2018) tax and paid adjustments end of the 2018) amortization period expense

* Changes in the presentation of corporate centre data, leading to changes in the Trade & Storage and Other segments in 2016.

35 Production and sales volumes

NATURAL GAS PRODUCTION BY THE PGNIG GROUP [mcm] FY 2018 Q4 2018 Q3 2018 Q2 2018 Q1 2018 FY 2017 Q4 2017 Q3 2017 Q2 2017 Q1 2017 FY 2016 Q4 2016 HIGH-METHANE GAS (E) 1,834 473 436 461 464 1,863 461 459 469 474 1,919 473 including in Poland 1,296 336 323 314 323 1,315 335 325 327 328 1,401 347 including in Norway 538 137 113 147 141 548 126 134 142 146 518 126 NITROGEN-RICH GAS (Ls/Lw as E equiv.) 2,712 722 659 612 719 2,674 731 664 567 712 2,540 692 including in Poland 2,512 673 606 559 674 2,524 684 627 533 680 2,481 670 including in Pakistan 200 49 53 53 45 150 47 37 34 32 59 22 TOTAL (measured as E equivalent) 4,546 1,195 1,095 1,073 1,183 4,537 1,192 1,123 1,036 1,186 4,458 1,165

NATURAL GAS SALES BY THE PGNiG GROUP [mcm] HIGH-METHANE GAS (E) 27,466 8,141 4,777 5,134 9,414 25,291 7,603 4,298 5,079 8,311 22,895 6,921 including PST sales outside PGNiG Group 3,929 1,360 855 716 998 2,186 603 452 482 649 2,510 561 NITROGEN-RICH GAS (Ls/Lw as E equiv.) 1,578 442 337 308 491 1,496 419 296 312 469 1,371 417 TOTAL (measured as E equivalent) 29,044 8,583 5,114 5,442 9,905 26,787 8,022 4,594 5,391 8,780 24,266 7,338 including sales directly from the fields 855 228 211 179 237 796 226 182 161 227 718 209

NATURAL GAS IMPORTS BY PGNiG SA [mcm] Total 13,530 2,949 3,324 3,419 3,837 13,714 3,673 3,488 3,334 3,219 11,527 2,968 including: sources east of Poland 9,038 1,097 2,357 2,602 2,982 9,656 2,540 1,889 2,518 2,709 10,248 2,539 including: LNG 2,713 759 635 815 505 1,715 383 470 475 387 974 380

CRUDE OIL, PGNiG GROUP (thousand tonnes) Production of crude oil and condensate 1,345 353 320 324 348 1,257 329 313 269 346 1,318 344 including in Poland 818 219 202 189 208 787 220 203 148 216 763 207 including in Norway 527 134 118 135 140 470 109 110 121 130 555 137

Sales of crude oil and condensate 1,410 378 309 294 429 1,270 313 251 316 390 1,346 325 including in Poland 817 225 194 188 210 791 222 190 161 218 753 198 including in Norway 593 153 115 106 219 479 91 61 155 172 593 127

GENERATION Production of heat, net (sales) (TJ) 40,659 14,255 2,942 4,425 19,037 42,607 14,195 3,476 6,848 18,088 39,527 15,079 Production of electricity, net, secondary generation (for sale) 3,974 1,315 523 598 1,538 3,882 1,280 407 737 1,458 3,604 1,204 (GWh)

36 Glossary

2P Proven reserves of fossil fuels bbl Barrel

BGK Bank Gospodarstwa Krajowego boe / mm boe Barrel of oil equivalent / Million barrel of oil equivalent (one barrel is approx, 0,136 tonnes)

CAGR Compound annual growth rate

CAPEX Capital expenses

CNG Compressed Natural Gas cm / bcm cubic meters / billion cubic meters D&A Depreciation and Amortization

DCF Discounted cash flow

EBIT Earnings before interest and taxes

EBITDA Earnings before interest, taxes, depreciation and amortization

JV Joint Venture

LNG Liquefied Natural Gas

PPE Polish Power Exchange

PSG Polska Spółka Gazownictwa

PST PGNiG Supply & Trading GmbH

RAB Regulatory Asset Base

WIG 20 Capitalization-weighted stock market index of the twenty largest companies on the Warsaw Stock Exchange

WSE Warsaw Stock Exchange

37 Contact details

Marcin Piechota More information Head of the Investor Relations Division Phone:+48 22 106 43 22 Mobile:+48 885 889 890 Email: marcin.piechota@pgnig.pl

Piotr Gałek Investor Relations Specialist Phone:+48 22 106 48 46 Mobile:+48 723 235 652 Email: [email protected]

Aleksander Kutnik Investor Relations Specialist Phone:+48 22 106 47 97 Mobile:+48 723 239 162 Email: [email protected]

Anna Galińska Investor Relations Specialist Investor Relations website Phone:+48 22 106 41 09 www.ri.pgnig.pl Mobile:+48 723 514 086 Email: [email protected]

Polskie Górnictwo Naftowe i Gazownictwo S.A. ul. M. Kasprzaka 25 01-224 Warsaw, Poland Fax:+48 22 691 81 23 www.en.pgnig.pl

Disclaimer All opinions, judgements and projections contained in this presentation (‘Presentation’) have been prepared by Polskie Górnictwo Naftowe i Gazownictwo (PGNiG) S.A. relying on publicly available information. The information contained herein is subject to change without notice and may be incomplete or condensed, and it may omit some important details. No information contained herein is intended as an investment offer or recommendation or as an offer to provide any services. This Presentation contains information and statements relating to future, but not to past, events. Any such forward-looking statements are based on our current assumptions, but as they relate to the future and are subject to risks and uncertainties, actual results or events could materially differ from those anticipated in those forward-looking statements. This Presentation should not be acted or relied on in making any investment decisions. More information on PGNiG can be found in its current and periodic reports. PGNiG undertakes no obligation to update, and assumes no responsibility for the accuracy, completeness or use of, information contained in this Presentation. No information contained herein is intended as legal or other professional advice.