Polish state energy giant Orlen has completed the sale of assets to Saudi Aramco and Hungary’s MOL that were part of the requirements to complete a merger with smaller Polish state-owned rival Lotos.
The deal, announced in January, will see the Saudi company take a 30% stake in Poland’s Gdańsk oil refinery as well as Lotos’ jet fuel business. MOL is acquiring 417 petrol stations from Lotos, which makes the Hungarian firm Poland’s third largest player in the fuel retail market, after Orlen itself and BP.
The divestment was a regulatory requirement set by the European Commission to pave the way for Orlen’s takeover of Lotos.
“The contracts concluded with Aramco are of strategic importance for further ensuring supplies to Poland, but also to the entire region,” said Orlen’s CEO, Daniel Obajtek. “We have built the largest group in Central Europe, strong in many areas, which effectively strengthens current lines of business and develops new ones.”
Zawarte umowy z @Aramco mają strategiczne znaczenie dla dalszego zapewnienia dostaw surowca dla Polski, ale też całego regionu. Zbudowaliśmy największą grupę w Europie Środkowej, silną biznesowo w wielu obszarach, która skutecznie wzmacnia obecne i rozwija nowe linie biznesowe pic.twitter.com/vsjw3pUf5q
— Daniel Obajtek (@DanielObajtek) November 30, 2022
During a press conference on Tuesday, Orlen’s director of equity investments, Robert Śleszyński, noted that Orlen will still hold a 70% stake in the Gdańsk refinery, which is central Europe’s biggest, with a total refining capacity of 210,000 barrels per day.
“It’s not that someone is going to tell us what to do or stop us from operating the refinery,” he said, adding that “cooperating with a partner with such experience…[will] build value and knowledge”.
Orlen also announced that Aramco will provide oil supplies that cover 45% of the needs of the refinery. Obajtek in May this year pledged that Orlen would ensure oil supplies not only in Poland but also to the surrounding region following the embargo on Russian oil.
Mohammed Y. Al Qahtani, Aramco’s senior vice president of downstream, said the deal will help “cement Aramco’s presence in a key European market and provide a unique opportunity to…expand our global downstream footprint and support the diversification of our portfolio”.
On Wednesday, Orlen, Aramco and Aramco’s subsidiary SABIC also announced the signing of an agreement to cooperate on a potential petrochemicals project in Gdańsk.
The prospective deal was announced by Orlen in July, as the potential joint development of a petrochemical complex project comprising a large-scale mixed-fuel steam cracker with downstream facilities that would be integrated with the Gdańsk refinery, local news service Trójmiasto reported at the time.
Meanwhile, the deal with MOL – worth $610 million and which also involves Orlen acquiring 144 petrol stations from MOL in Hungary and 41 in Slovakia – will not change much on the wholesale market, reports Business Insider Polska.
MOL, which has three refineries – near Bratislava, Budapest and Rijeka – will buy the vast majority of its fuel for its outlets in Poland from Polish refineries. Contracts for its supply were part of the agreement on the sale of Lotos’ assets.
Initially, all MOL stations will operate under the current names – Lotos and Slovnaft – but eventually they will have MOL branding, with the first ones under the new logo starting to operate in Poland later this year.
Main photo credit: Orlen press pack
Alicja Ptak is senior editor at Notes from Poland and a multimedia journalist. She previously worked for Reuters.
