Polish state energy firm pledges to ensure oil supplies to region in case of Russian oil embargo

Polish state energy giant Orlen has pledged to ensure oil supplies not only in Poland but also to the surrounding region if imports from Russia are stopped. The announcement comes as the European Commission yesterday revealed plans to introduce an embargo on Russian oil.

“At the moment of withdrawal of supplies from the east, Orlen will maintain a stable supply of crude oil not only to Poland but to the entire Central and Eastern Europe,” the firm told the Polish Press Agency (PAP) on Wednesday. “The company is prepared for any scenario and will implement guidelines resulting from international sanctions.”

In a further interview with Business Insider Polska, also published on Wednesday, Orlen’s CEO, Daniel Obajtek, said oil supplies remain secure thanks to a contract signed with Saudi Aramco in January, which envisages increasing supply to 400,000 barrels per day.

“In total, it will be 20 million tonnes of oil per year, while the total needs of the new Orlen Group after the merger with Lotos will be 46 million tonnes,” Obajtek told Business Insider, referring to a long-planned merger with a smaller state-owned rival expected to be finalised by in June or July.

The company currently has six refineries in Poland, the Czech Republic and Lithuania, where it processes 29.5 million tonnes of crude oil a year.

“There are also other markets from which we can import crude under contracts and we can supplement our purchases on the spot market,” he said, adding that currently 70% of the raw material in the entire Orlen Group comes from outside Russia. The remaining 30% comes under long-term contracts and breaking them would require an EU embargo.

Obajtek also held talks with Aramco’s representatives “on further enhancing cooperation in many areas”, he tweeted on Wednesday. Orlen’s press office did not immediately reply to questions from Notes from Poland about details of the talks.

On Wednesday, the EU proposed some of its toughest measures yet against Russia, as part of the sanctions imposed in response to the invasion of Ukraine. The EU has pledged previously to reduce gas imports and now aims to phase out crude oil over six months and refined products by the end of 2022.

Hungary has rejected the proposal as unacceptable and the Czech and Slovak governments want a transition period, due to their high dependence on Russian fuel, the BBC reports.

Poland has been one of the strongest advocates for tougher sanctions against Russia, including a ban on energy imports. Its government has pledged to end the import of Russian oil, gas and coal by the end of this year.

Last week, Russia’s Gazprom cut off supplies of gas to Poland and Bulgaria, after the two countries refused Moscow’s demand to start paying in roubles.

Orlen’s planned merger with Lotos has drawn some concern from opposition politicians and media in Poland because it involves selling off petrol stations to Hungary’s MOL, which some critics claim has links to Russia.

Obajtek, however, has dismissed such concerns, telling Business Insider that they are “scaremongering and fairy tales”. He said that the merger is in Poland’s national interest.

Main image credit: Orlen (press materials)

Alicja Ptak

Alicja Ptak is senior editor at Notes from Poland and a multimedia journalist. She previously worked for Reuters.