Larger conglomerate will mean energy security for Poland, says Orlen CEO

Daniel Obajtek warned that smaller companies are in danger of being targets for takeovers by foreign competitors

editor: Grzegorz Adamczyk
author: polskieradio24.pl
Source: orlen.pl

The CEO of the fuel giant Orlen, Daniel Obajtek, has said that the merger with another state oil company, Lotos, which was finalized on Monday, and the planned merger with the gas giant PGNiG, would create an important player on the international market.

In an interview for Polish public Radio 1 on Tuesday, Obajtek said the merger would make it “easier to negotiate oil and gas purchases and made sense from the point of view of economies of scale.”

He also said that for years his company has been seeking stable sources of oil supply and therefore had signed an agreement with Saudi Arabian giant Saudi Aramco, which has also recently become a shareholder in Orlen. 

Obajtek said he believes these moves will guarantee Poland access to non-Russia oil at a time of war in Ukraine. “We did not wait for Covid-19 or the war in the east, for five years we have been diversifying oil supplies,” he said.

The Orlen CEO further argued that his company must make itself an attractive trading partner for other national conglomerates operating on the gas and oil markets, and that is why it must become a multi-energy company. It is in this way that Orlen can have some influence on both the price and quality of imported oil as well as on the petrochemical industry in Poland. “Only a big player on the market can have the muscle required to guarantee a stable supply,” Obajtek said. 

Orlen, in Obajtek’s view, has given Polish car drivers security in terms of access to fuel, and it is thanks to the presence of Orlen on the Polish market that petrol prices are still some of the lowest in Europe. 

There is nothing unusual about Poland creating a multi-energy conglomerate, the CEO said, explaining that other countries such as Spain are also doing it. Smaller companies are in danger of being targets for takeovers by foreign competitors, he warned.

Obajtek has also repeatedly argued that with Poland facing a challenging and costly change in its energy mix, it needs access to new technologies. He claimed that Orlen, with its vast financial resources, has the clout to begin to re-orientate itself to the energy of tomorrow, including biogas, hydrogen and power generation from renewables such as wind power. 

On Monday, the Orlen Group finalized its merger with Lotos Group, strengthening its leading role in the fuel and energy industry in Central and Eastern Europe. The final step in the process that has now been successfully completed was registration of the merger by the District Court of Łódź.

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