Polish Briefing: Cheaper deposits in Canada weigh on Orlen’s results

What goes on in Poland on the 6th of April.

Cheaper deposits in Canada weigh on Orlen’s results

The decline in the value of upstream assets in Canada had the greatest impact on Orlen’s write-offs.

“PKN Orlen recognized write-offs and reversals in the value of fixed assets, the total impact of which on the consolidated result of the concern for 2020 will be approximately minus PLN 950 million,” the Polish oil tycoon said in a statement. The highest-value write-offs, i.e. PLN 803 million, relate to Orlen Upstream’s fixed assets.

PKN Orlen informed that the estimated amount of net write-offs results from the reevaluation of mining assets in Orlen Upstream Polska and Orlen Upstream Canada. The level of write-offs is primarily due to a significant decline in market prices for Canadian upstream assets in 2020, a decline in 2P reserves reported in the Canadian asset reserve report, and an increase in discount rates reflecting the increased market risk associated with the mining operations.