Structure of the organization
{GRI 2.3., GRI 2.6., GRI 2.9.}
As at December 31st 2013, the LOTOS Group comprised Grupa LOTOS (the Parent), and 22 production and service companies, including:
- 13 direct subsidiaries of Grupa LOTOS,
- 9 indirect subsidiaries of Grupa LOTOS.
Composition of the LOTOS Group
| Name | Registered office | Business profile | Grupa LOTOS's shareholding | |||
|---|---|---|---|---|---|---|
| Dec 31st 2013 | Dec 31st 2012 | |||||
| Parent | ||||||
| Grupa LOTOS S.A. | Gdańsk | Production and processing of refined petroleum products (mainly fuels) and their wholesale | Not applicable | Not applicable | ||
| Direct fully-consolidated subsidiaries | ||||||
|
LOTOS Petrobaltic S.A. (parent of another group: LOTOS Petrobaltic Group) |
Gdańsk | Acquisition of crude oil and natural gas deposits and hydrocarbon production | 99.98% (1) | 99.96% | ||
|
LOTOS Paliwa Sp. z o.o. |
Gdańsk | Wholesale and retail sale of fuels and light fuel oil, management of the LOTOS service station chain | 100.00% | 100.00% | ||
|
LOTOS Oil S.A. |
Gdańsk | Production and sale of lubricating oils and lubricants, and sale of base oils | 100.00% | 100.00% | ||
|
LOTOS Asfalt Sp. z o.o. |
Gdańsk | Production and sale of bitumens | 100.00% | 100.00% | ||
|
LOTOS Kolej Sp. z o.o. |
Gdańsk | Railway transport | 100.00% | 100.00% | ||
|
LOTOS Serwis Sp. z o.o. |
Gdańsk | Maintenance of mechanical and electric operations and controlling devices, overhaul and repair services | 100.00% | 100.00% | ||
|
LOTOS Lab Sp. z o.o. |
Gdańsk | Laboratory analyses | 100.00% | 100.00% | ||
|
LOTOS Straż Sp. z o.o. |
Gdańsk | Fire services | 100.00% | 100.00% | ||
|
LOTOS Ochrona Sp. z o.o. |
Gdańsk | Security services | 100.00% | 100.00% | ||
|
LOTOS Terminale S.A. (2) (parent of another group: LOTOS Terminale Group) |
Czechowice-Dziedzice | Storage and distribution of fuels | 100.00% | 100.00% | ||
|
LOTOS Infrastruktura S.A. (3) |
Jasło | Storage and distribution of fuels Renting and operating of own or leased real estate | 100.00% | 100.00% | ||
|
LOTOS Gaz S.A. (in liquidation) |
Kraków | Dormant | 100.00% | 100.00% | ||
|
LOTOS Park Technologiczny Sp. z o.o. |
Jasło | Dormant | 100.00% | 100.00% | ||
| Indirect fully-consolidated subsidiaries | ||||||
| LOTOS Terminale Group | ||||||
|
Czechowice-Dziedzice | Production and distribution of electricity, heat and gas | 100.00% | 100.00% | ||
|
Czechowice-Dziedzice | Production of fatty acid methyl esters (FAME) | 100.00% | 100.00% | ||
| LOTOS Petrobaltic Group | ||||||
|
Stavanger, Norway | Oil exploration and production on the Norwegian Continental Shelf, provision of services related to oil exploration and production | 99.98% (4) | 99.96% | ||
|
Curaçao, Netherlands Antilles | Sea transport services (dormant) | 99.98% (4) | 99.96% | ||
|
Władysławowo | Production of electricity, heat, LPG and natural gas condensate | 99.98% (4) | 99.96% | ||
|
Gdańsk | Support activities for extraction and quarrying operations (dormant) | 99.98% (4, 5) | - | ||
|
Gdańsk | Exploration and production of crude oil and natural gas (dormant) | 99.98% (4, 6) | - | ||
|
Nicosia, Cyprus | Storage and transport of crude oil, other sea transport services | 99.98% (4) | 99.96% | ||
|
Gdańsk | Sea transport support activities, ship operation advisory services | 1% (4) | 99.96% | ||
|
Gdańsk | Provision of sea transport and related services | 1% (4, 7) | - | ||
|
Nicosia, Cyprus | Provision of sea transport and related services | 99.98% (4) | 99.96% | ||
|
Nicosia, Cyprus | Management of own assets | 99.98% (4) | 99.96% | ||
|
Nicosia, Cyprus | Ship chartering | 99.98% (4) | 99.96% | ||
|
Nicosia, Cyprus | Ship chartering | 99.98% (4) | 99.96% | ||
|
Nicosia, Cyprus | Ship chartering | 99.98% (4) | 99.96% | ||
|
Nicosia, Cyprus | Ship chartering | 99.98% (4) | 99.96% | ||
|
Nicosia, Cyprus | Ship chartering | 99.98% (4) | 99.96% | ||
|
Nicosia, Cyprus | Ship chartering | 99.98% (4) | 99.96% | ||
|
Gargždai, Lithuania | Crude oil exploration and production, drilling services, and purchase and sale of crude oil | 99.98% (4) | 99.96% | ||
|
Gargždai, Lithuania | Crude oil exploration and production | 99.98% (4) | 99.96% | ||
|
Gargždai, Lithuania | Crude oil exploration and production | 99.98% (4) | 99.96% | ||
| Equity-accounted entities | ||||||
|
Gdańsk | Sale of aviation fuel and logistics services | 50.00% (8) | 100.00% | ||
| LOTOS Petrobaltic Group | ||||||
|
Gdańsk | Oil and gas production (support activities for oil and gas production) | 49.99% (4, 9) | 99.96% | ||
|
Gdańsk | Crude oil and gas production | 81.68% (4, 10) | 99.96% | ||
| Jednostki konsolidowane metodą proporcjonalną | ||||||
| GK AB LOTOS Geonafta | ||||||
|
Gargždai, Lithuania | Crude oil exploration and production | 49.99% (4) | 49.98% | ||
(1) In 2013, Grupa LOTOS continued the squeeze-out of shares in LOTOS Petrobaltic S.A. Following the acquisition of shares in LOTOS Petrobaltic S.A. as part of a squeeze-out, as at December 31st 2013 Grupa LOTOS held a 99.98% interest in the share capital of LOTOS Petrobaltic S.A.
(2) On July 30th 2013, the change of the company’s name from LOTOS Czechowice S.A. to LOTOS Terminale S.A. was registered.
(3) On April 18th 2013, the change of the company’s name from LOTOS Jasło S.A. to LOTOS Infrastruktura S.A. was registered.
(4) The shareholding changes described in item (1) above had an effect on the indirect equity interests held by Grupa LOTOS in the LOTOS Petrobaltic Group entities.
(5) On December 30th 2013, LOTOS Petrobaltic S.A. acquired 100% of the shares in B8 Sp. z o.o. One of the objectives of the acquisition was to create a vehicle for financing development of the B8 field.
(6) On December 30th 2013, LOTOS Petrobaltic S.A. acquired a 99.5% interest in B8 Spółka z ograniczoną odpowiedzialnością BALTIC spółka komandytowo-akcyjna, and became a limited partner in the company. B8 Sp. z o.o., holding 0.5% of the company shares, is a minority shareholder and the general partner in the company. One of the objectives of the acquisition was to create a vehicle for the financing of development of the B8 field.
(7) On December 20th 2013, Technical Ship Management Sp. z o.o. acquired a 100% interest in SPV Baltic Sp. z o.o.
(8) On November 25th 2013, Grupa LOTOS sold to BP Europe SE 1,000 shares in LOTOS Tank Sp. z o.o., representing 50% of LOTOS Tank Sp. z o.o.'s share capital. The sale was connected with a joint venture agreement executed between Grupa LOTOS and BP Europa SE German Branch on June 25th 2013, providing for the establishment of a new entity on the basis of LOTOS Tank Sp. z o.o. (a Grupa LOTOS subsidiary), through which the two partners could pursue joint operations in the aviation fuel market. On December 17th 2013, the change of the company’s name from LOTOS Tank Sp. z o.o. to LOTOS-Air BP Polska Sp. z o.o. was registered.
(9) The sale by LOTOS Petrobaltic S.A. of a 50% interest in Baltic Gas Sp. z o.o. to CalEnergy Resources Poland Sp. z o.o. was registered on April 9th 2013.
(10) The presented ownership interest was determined based on the value of contributions made by individual partners relative to the sum of all contributions as at December 31st 2013:
- Baltic Gas Sp. z o.o. (general partner) (0.002%),
- LOTOS Petrobaltic S.A. (limited partner) (81.693%),
- CalEnergy Resources Poland Sp. z o.o. (“CalEnergy”) (limited partner) (18.305%).
Grupa LOTOS’s indirect ownership interest in Baltic Gas spółka z ograniczoną odpowiedzialnością i wspólnicy sp. k. (a jointly-controlled entity) is 81.68%.
Baltic Gas spółka z ograniczoną odpowiedzialnością i wspólnicy spółka komandytowa (“Baltic Gas”) is a partnership. The partnership agreement defines the profit and loss sharing ratio, whereby Baltic Gas Sp. z o.o. holds 0.001% share in profits and 100% share in losses, LOTOS Petrobaltic S.A. holds 50.9995% share in profits, and CalEnergy holds 48.9995% share in profits. The respective percentage shares in the total vote are not given, as any matters subject to the partners’ decision, as set forth in the partnership agreement, require unanimous approval, or the partners are required to unanimously pass a resolution determining the procedure for deciding on other matters not specified in the partnership agreement. For the purposes of the IFRS, Baltic Gas is an entity jointly-controlled by Grupa LOTOS.
Structure of the LOTOS Group. As at December 31st 2013
(1) State Treasury – 0.01%, employee shares – 0.01%
(2) Limited partner
(3) General partner
(4) CalEnergy Resources Poland Sp. z o.o. – 50%
(5) CalEnergy Resources Poland Sp. z o.o. – limited partner
(6) 99% (own shares acquired for redemption) – Technical Ship Management Sp. z o.o.
(7) BP Europa SE – 50%
Grupa LOTOS also holds 8.97% of shares in P.P.P.P. Naftoport Sp. z o.o. (a PERN Przyjaźń Group company).
Within the LOTOS Group, the role of Grupa LOTOS as the parent entity is to integrate the key management and support functions. As such, Grupa LOTOS has implemented a segmental management model.
A segment is a separate area of operations managed within the LOTOS Group by a designated member of the Board of Grupa LOTOS.
This model enhances management efficiency, delivering LOTOS Group-wide cost and revenue synergies. Segmental management provides for consistent implementation of the strategy, coordinated planning, integrated operational management and maintenance of uniform corporate standards.
Management segment
Head: President of the Board of Grupa LOTOS, Chief Executive Officer
Tasks: increasing the LOTOS Group’s value through overall management of its operations, including coordination of strategy development, definition of development directions for individual business areas, and coordination of process support functions.
Exploration and production segment
Head: Vice-President of the Management Board of Grupa LOTOS, Exploration&Production.
Tasks: formulation of development strategies for the LOTOS Group in oil and gas exploration and production, as well as management and supervision of these activities.
Companies: LOTOS Petrobaltic with subsidiaries and affiliates.
Operational segment
Head: Vice-President of the Management Board of Grupa LOTOS, Chief Operation Officer.
Tasks: formulation of strategies for maintaining and expanding production facilities, as well as supervision and coordination of all matters regarding the processing of crude oil, refinery production and associated technologies, definition of refinery production policy objectives, supervision of production-related R&D work, coordination of technical and technological development projects, ensuring the required technical performance of assets, supervision of environmental protection processes, safety processes and physical protection.
Companies: LOTOS Infrastruktura, LOTOS Lab, LOTOS Ochrona, LOTOS Serwis, and LOTOS Straż.
Changes in 2013: following business profile changes, LOTOS Czechowice was renamed LOTOS Terminale and assigned to the marketing segment, while LOTOS Jasło changed its name to LOTOS Infrastruktura.
Marketing segment
Head: Vice-President of the Management Board of Grupa LOTOS, Chief Commercial Officer.
Tasks: formulation of marketing strategies as well as effective management of sales, supplies and distribution of crude oil and petroleum products, responsibility for the development of trading and optimisation activities.
Companies: LOTOS-Air BP Polska, LOTOS Asfalt, LOTOS Kolej, LOTOS Oil, LOTOS Paliwa and LOTOS Terminale with subsidiaries.
Changes in 2013: Grupa LOTOS sold 50% of its interest in LOTOS Tank, which was then renamed LOTOS-Air BP Polska. Also in 2013, the marketing segment was expanded to include LOTOS Terminale (formerly (in 2012) LOTOS Czechowice), which was transferred from the operational segment.
Financial segment
Head: Vice-President of the Board, Chief Financial Officer.
Tasks: monitoring of the implementation of the LOTOS Group’s strategies and overall management of financial and accounting processes, including formulation of financial, legal and insurance strategies and monitoring of their implementation, management of budgeting and controlling, development and implementation of financial risk management strategies, and overall management of assets and restructuring processes.
Companies: LOTOS Park Technologiczny and LOTOS Gaz w likwidacji (in liquidation) and its subsidiary.
For purposes of the economic efficiency analysis and clear presentation of the financial statements, the following two main reporting operations segments can be identified in the operational activities of the LOTOS Group:
- Upstream operations segment – comprising activities concerning exploration for and exploitation of crude oil and natural gas deposits;
- Downstream and marketing operations segment – comprising activities of companies concerned with production and processing of refined petroleum products as well as their retail and wholesale, and support, transport and servicing activities.
Key objectives of the organizational changes implemented in 2013:
- raise the stature, decision-making powers and accountability of the corporate departments,
- enhance the management model,
- minimise management costs,
- improve segmental reporting,
- enhance the communication process,
- optimise accounting, finance, trading and legal functions.
At the end of 2013, Grupa LOTOS's organization and management structure, which reflects the division of competences and the relationships between various functions and tasks performed at the Company, and illustrates the reporting hierarchy of organizational units and management, comprised the following units:
- 16 divisions, including 5 divisions reporting directly to the Chief Executive Officer,
- 36 offices,
- 16 departments,
- 8 plants.
Operational segments. As at December 31st 2013
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