Saudi Aramco to partner PKN Orlen
Mikołaj Marcinowski 12.01.2022 16:00
PKN Orlen makes next steps forward in its development. Some moves containing cooperation with Saudi Aramco and Hungarian company MOL has been announced.
As we read on Polish company website - ORLEN.PL:
‘This is a watershed moment for the Polish fuel industry. We are about to finalise the acquisition of LOTOS Group, a deal intended to benefit the entire Polish economy, both companies involved, their respective customers, employees and shareholders. Ever since the process was launched, we have emphasised that the priority is to derive additional benefits from the merger remedies, and we have achieved just that. If the merger is followed through, it would provide an opportunity to ensure supplies to Poland of crude oil of sustainably high quality from Saudi Aramco. Such international partnerships are crucial to our vision of building the largest multi-utility group in this part of Europe. In the retail area, we have negotiated with our Hungarian partner an asset exchange deal, which will directly advance our plans of geographical expansion by strengthening the retail chain in Slovakia, but also through the entry into a completely new market of Hungary. Proceeds from the divestment of fuel stations will partly be applied to acquire another 100 retail sites across the region, in line with our strategic objectives. The merger between PKN ORLEN and the LOTOS Group will mark the inception of a single strong group capable of delivering environmentally friendly energy to the Polish economy and meeting the challenges posed by the fuel and energy transition,’ says Daniel Obajtek, President of the PKN ORLEN Management Board.
‘These acquisitions will support the diversification of Aramco’s product portfolio across the hydrocarbon value chain — including a focus on liquids-to-chemicals pathways. Our expanding global network of refineries and chemical joint ventures allows us to reach new markets with our products, and strategically place crude oil volumes across different geographies. Our business objectives for oil and chemicals are closely aligned with PKN ORLEN, and we are exploring additional opportunities in the European petrochemicals market, as well as in R&D,’ says Mohammed Al Qahtani, Aramco Vice President for Downstream.
The acquisition of the LOTOS Group by PKN ORLEN would provide a real opportunity to diversify the sources of feedstock supplies. If the acquisition is finalised, PKN ORLEN will guarantee, under a long-term agreement, crude oil supplies from Saudi Aramco at the level of 200 to 337 thousand barrels per day. It is estimated that post merger this would cover up to 45% of total oil demand from the entire ORLEN Group, in Poland, Lithuania and the Czech Republic.
In order to maximise benefits of the partnerships with strong global players, PKN ORLEN, under separate agreements with Saudi Aramco and SABIC (one of the world’s largest petrochemical companies), is to discuss potential joint investment projects in advanced high-margin petrochemicals. As potential areas for collaboration, opportunities to pursue development projects in Poland or in Central and Eastern Europe will be explored.
PKN ORLEN and Saudi Aramco have also signed an agreement providing for their possible collaboration in research and development. R&D has been assigned a key priority in the ORLEN2030 strategy, and projects designed to foster innovation have been stepped up over the past three years. One of these projects is a state-of-the art research and development centre launched by PKN ORLEN in 2021, which provides real support in the pursuit of its strategic goals.