Polish Orlen hails merger, new Saudi and Hungarian partners – The First News
The acquisition of Polish oil company Lotos by its larger counterpart PKN Orlen, with some of Lotos’ assets having been sold to Saudi and Hungarian partners, will provide a wide range of benefits, Orlen’s CEO said.
In July 2020, the European Commission approved the acquisition of Lotos Group by PKN Orlen subject to certain divestments being completed. Lotos and Orlen are controlled by the Polish state.
Saudi Aramco, a Saudi oil company, will buy a stake in Lotos’ refining subsidiary, while MOL Group, a Hungarian oil and gas company, will buy 417 service stations from Lotos, while Orlen will buy 144 operated service stations by the MOL Group in Hungary and 41 in Slovakia, according to a report published by Orlen.
“We are finalizing the acquisition of Lotos Group, which will benefit the Polish economy, both companies and their customers, employees and shareholders,” PKN Orlen CEO Daniel Obajtek said on Wednesday.
In addition, PKN Orlen has signed an agreement with Saudi Aramco for the supply of oil, as well as strategic cooperation agreements in petrochemical activities and R&D.
According to Obajtek, the contract with Saudi Aramco is an opportunity to ensure a stable source of quality oil supply for Poland.
According to the contract, the Saudi company will deliver between 200,000 and 337,000 barrels of oil per day to Orlen, or about 45% of the total demand from Orlen’s refineries in Poland, Lithuania and the Czech Republic, Obajtek said.
Orlen’s CEO also praised Saudi Aramco’s technology. “They have 22nd century solutions,” he said.
Commenting on the gas station swap with MOL, Obajtek said the move will help Orlen accelerate its overseas expansion plans. As a result of this agreement, the Polish company will gain a 7% market share in the Hungarian market and become the fourth gas station operator in Hungary.
Proceeds from the sale of the Lotos business will also accelerate the expansion of Orlen’s service station network. Orlen says it will soon have nearly 400 new service stations that will support its sales and Orlen brand recognition in several key markets.
Jacek Sasin, Poland’s deputy prime minister and state property minister, said he was pleased with Wednesday’s deal.
“The acquisition of Lotos and the establishment of cooperation with such strong partners will facilitate overseas expansion, helping the eagle of Orlen (which is part of the company logo – PAP) to become recognizable throughout Central and Eastern Europe,” Sasin said.