Sell-offs pave way for new Polish energy giant

Polish oil and gas firm PKN Orlen will sell refinery assets to Saudi Aramco and swap petrol stations with Hungarian energy company MOL to clear the way for a takeover of Grupa Lotos, it announced Wednesday.

Saudi Aramco will pay USD 255 million for a 30% stake in Lotos’ refinery operations in Gdansk, while MOL will pay USD 610 million for 417 of its petrol stations in Poland. MOL will meanwhile sell 185 of its own gas stations –  144 in Hungary and 41 in Slovakia – to PKN Orlen for USD 259 million. Aramco will supply PKN Orlen with 200-337,000 barrels of oil per day from later in the year, nearly half of the Orlen Group’s demand, and reduce reliance on Russian oil in the process.

The acquisition of Lotos takes PKN Orlen one step closer to becoming the kind of strategic global company that Poland’s ruling Law and Justice (PIS) party wants to create. On the news, Polish President Andrzej Duda tweeted: “thanks to the contracts signed, the energy security of central Europe increases significantly.”

PKN Orlen’s CEO Daniel Obajtek called the Orlen-Lotos merger a “historic moment” and “gigantic opportunity” for Poland. “We are creating the strongest fuel and energy company in this part of Europe,” he added.

Orlen originally announced its plan to buy Lotos in 2018, when the European Commission outlined its stipulations for approving the deal. PKN Orlen’s next target is natural gas peer PGNiG, which must first receive the approval of Poland’s anti-monopoly agency.

Source: Argus Media, Reuters, bne Intellinews