Polish state energy giant Orlen overtakes Russia’s Gazprom in market value for first time

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Notes from Poland is run by a small editorial team and is published by an independent, non-profit foundation that is funded through donations from our readers. We cannot do what we do without your support.

Polish state energy firm Orlen has seen its market valuation rise to its highest ever level, and surpass Russia’s Gazprom for the first time.

Shares in the Polish company rose 5.6% on Wednesday, lifting its market capitalisation to almost 150 billion zloty (€35.2 billion). By comparison, Gazprom’s market value on the Moscow Exchange stood at about €33.9 billion.

The situation marks a dramatic turnaround since 2022, when, just before Russia launched its full-scale invasion of Ukraine, Gazprom’s market value exceeded €100 billion while Orlen’s was just under €7 billion.

Since then, Gazprom has lost significant market share in Europe due to restrictions on Russian gas imports and its own decision to halt some gas pipeline deliveries, including to Poland in April 2022.

Gazprom has also lost ground to domestic rival Novatek, whose liquefied natural gas (LNG) exports by sea have helped it capture a larger share of Europe’s remaining imports of Russian gas.

The European Union has only recently decided to fully phase out Russian gas imports. A ban on LNG will take effect from the start of 2027, followed by a ban on pipeline gas from autumn that year.

By contrast, Orlen has expanded steadily in recent years, with its role becoming even more important amid moves by Poland to make itself completely independent of Russian energy supplies, which began even before the invasion of 2022.

It is active in gas and oil extraction on the Norwegian continental shelf; has refineries in Poland, the Czech Republic and Lithuania; and runs a large fuel station network across seven countries.

Orlen’s value has also risen through the acquisition of other Polish state energy firms Lotos, PGNiG and Energa, helping it expand its business beyond oil into gas and electricity.

The group is also seeking to diversity away from fossil fuels, including by developing Poland’s first offshore wind farm, investing in clean hydrogen production, and building a network of hydrogen and bioLNG refuelling stations.

In 2023, Orlen was listed among Europe’s 50 largest companies in the first edition of the Fortune 500 Europe ranking.

Its shares have also gained from a recent rally on the Warsaw Stock Exchange. It has, however, significantly outperformed the market, rising just over 110% in the past 12 months, compared with a 30% gain in the exchange’s main WIG index, according to data from the stock aggregation website Stooq.pl.

The company’s shares have also been supported in recent days by volatility in global fuel markets in the aftermath of the war in Iran and stronger traffic at Polish petrol stations amid panic buying. Since the beginning of the year alone, Orlen has risen almost 35%.

Orlen’s share price over the last year compared to the WIG index (source: Stooq.pl )

On Wednesday, the stock gained further after positive analyst recommendations from brokerage houses, including Santander Bank Polska, PKO BP and BOŚ.

Analysts at the latter said Orlen’s valuation relative to projected operating profit remained low compared with peers listed on other exchanges, suggesting potential for further gains, reported industry news service WNP.

PKO BP, meanwhile, raised its recommendation to “buy” from “sell” on Tuesday, while Santander upgraded to “outperform” from “neutral” on Wednesday, setting target prices of 145–146 zloty per share, above the stock’s previous record of 134.45 zloty, reported financial news website Bankier.pl.

Notes from Poland is run by a small editorial team and published by an independent, non-profit foundation that is funded through donations from our readers. We cannot do what we do without your support.

Main image credit: Orlen Press Pack

Alicja Ptak

Alicja Ptak is deputy editor-in-chief of Notes from Poland and a multimedia journalist. She has written for Clean Energy Wire and The Times, and she hosts her own podcast, The Warsaw Wire, on Poland’s economy and energy sector. She previously worked for Reuters.