Grupa LOTOS 2013−2015 Efficiency and Growth programme has reached its most crucial phase. In the region of Pomerania, the initiative is contributing to capital investment, new job opportunities and government revenue.

In 2013 alone, LOTOS paid almost PLN 100m in taxes to local governments in the Province of Gdańsk.

“We act globally but think locally” says Paweł Olechnowicz, President of Grupa LOTOS Management Board. “LOTOS has established a strong brand reputation in Europe and beyond. The company is the best ambassador of Poland and Pomerania abroad. We are a socially responsible corporate citizen, but we also remember our roots, and our home region is a vital part of our investment programmes and our plans for the future. For LOTOS, Pomerania, and Poland in general, is an attractive place to invest.”

The 2013−2015 Efficiency and Growth programme will focus on projects designed to upscale hydrocarbon production from own sources (including from Baltic Sea fields) and raise the Gdańsk refinery's complexity factor. As a major benefit, the programme will stimulate the region's local labour market. With new investments in the pipeline, LOTOS will hire some 370 new employees, with another 1,200 or so jobs to be created by its contractors.

As part of the 2013−2015 Efficiency and Growth programme, LOTOS intends to spend as much as several billion złoty in the coming years, a portion of which will be earmarked for projects located in the Pomerania region.

Time to invest

Based on its investment plans for the coming years, the LOTOS Group intends to scale up its crude oil and natural gas production from Baltic Sea fields. Additionally, the Company plans to launch production from the B8 field at a rate of 250 thousand tonnes of crude annually by the end of 2015. The field's production potential is estimated at some 3.5 million tonnes of crude oil. On August 25th 2014, a subsidiary of LOTOS Petrobaltic entered into agreements with Polskie Inwestycje Rozwojowe S.A., Bank Gospodarstwa Krajowego and Bank Pekao S.A. for the financing of development of the B8 field.

The Company also plans to launch natural gas production from the B4 and B6 fields by the end of 2017. With the combined production potential of approximately 4 bcm, the fields are expected to yield 250 mcm of gas per annum.

To optimise production and improve the efficiency of the Gdańsk refinery, LOTOS plans to construct a number of facilities, including a delayed coking unit (DCU) and a hydrocarbon recovery unit (HRU).
The DCU would improve the refinery's annual output of motor fuels by 900 thousand tonnes and allow it to increase its refining margin by approximately USD 2/bbl. The unit is scheduled to come on stream in 2017–2018.

With the HRU, LOTOS would gain an additional 100 thousand tonnes of LPG and 25 thousand tonnes of gasoline annually, which will be placed on the market. The unit is scheduled to be placed in service in autumn 2016.

In the retail area, LOTOS intends to continue the dynamic expansion of its service station network and improve sales efficiency. In line with its strategy until 2015, the Company plans to achieve a 10% share in the retail fuel market (9.1% after Q2 2014).

Communications Office, Grupa LOTOS S.A., ul. Elbląska 135, 80-718 Gdańsk, Poland, tel. (+48) 58 308 87 31, (+48) 58 308 83 88, (+48) 58 308 83 55, e-mail: media@grupalotos.pl

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This material is not for release, publication or distribution, directly or indirectly, in the United States, Australia, Canada, and Japan.

This material has been prepared by Grupa LOTOS S.A. (“Company”) for information purposes only, it does not constitute an offer or a solicitation of any offer, and it is not to be relied on in making investment decisions to buy the Company's securities. This material is not a promotional or advertising material within the meaning of Art. 53 of the Polish Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies. As the Extraordinary General Meeting of the Company has passed a resolution to increase the Company's share capital through the issue of new shares (“Shares”) on a pre-emptive basis, the Company will apply to the Polish Financial Supervision Authority (“PFSA”) for approval of a prospectus for the issue (“Prospectus”), which will be the sole legally binding document containing information about the Company and the public offering of the Shares in Poland (“Offering”). The Company may proceed with the Offering only after the Prospectus has been approved by the PFSA. The Prospectus will be made available to the general public in compliance with applicable laws.

This material is not a recommendation within the meaning of the Minister of Finance’s Regulation on information which constitutes recommendations concerning financial instruments or their issuers, dated October 19th 2005.

This material (and any information presented herein) does not contain or constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States, Australia, Canada, Japan or in any other jurisdiction. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended (“US Securities Act), and they may not be offered or sold in the United States unless they are registered under the US Securities Act or unless they are exempted from the registration requirements of the US Securities Act. The securities will not be publicly offered in the United States.

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