Polish energy giant PKN Orlen mulls purchase of German refineryReading Time: 2 minutes
Polish refiner PKN Orlen is considering buying a majority stake in the PCK Schwedt refinery in north-east Germany, which until Friday 16 September was controlled by a subsidiary of Russia’s Rosneft, Reuters learned from sources in Poland and Germany. The deal could offer a solution to the upcoming EU’s oil embargo against Russia due to take effect on January 1.
The German government handed temporary control of the PCK Schwedt refinery to the national energy regulator on Friday, under the national energy security law, wresting operations from the Russian state-controlled energy firm Rosneft, the majority owner. Germany has also put two refineries in south Germany in the hands of the regulator.
Germany’s Economy Ministry said the move was necessary to counteract the threat to its energy security, and because service providers were no longer willing to work with Rosneft. The German government took control of the German subsidiaries Gazprom in a similar move in April.
PCK Schwedt could pipe oil from Gdansk
Poland had earlier offered to supply landlocked PCK Schwedt with oil from a terminal in Gdansk via Polish pipelines. However, Poland’s ruling party PiS, which is fiercely anti-Russian, insisted that the refinery should first be removed from Kremlin control.
After Germany’s ousting of Rosneft, the new development could solve another pressing issue: PCK’s dependency on Russian crude oil.
Germany has been trying to find alternatives to Russian oil for months. According to the earlier calculations of the German Economy Ministry, sourcing from the Baltic Sea port of Rostock would cover only up to 60% of the oil requirement.
Even this solution would endanger both short-term fuel supplies and jobs at the refinery, which employs around 1,200 people and provides 90% of Berlin’s fuel.
Sourcing crude from the Gdansk terminal would provide more oil, and therefore a more favourable solution for PCK Schwedt.
Deal yet to be confirmed by PKN Orlen
Michal Kozak, senior equity analyst at Polish brokerage Trigon, described the deal to news agency Reuters as “an opportunistic buy (that) might be worth considering”.
While PKN Orlen said it is “monitoring the situation”, the Polish Climate Ministry and the German Economy Ministry declined to comment to Reuters.
PKN Orlen runs the largest network of petrol stations in Central and Eastern Europe, with a presence in Czechia, Slovakia, Lithuania, Poland and Germany. Poland’s government has identified it as a potential strategic global company.
The PCK Schwedt refinery, Germany’s fourth largest, was built in the 1960s and has received all of its crude from Russia via the Druzhba pipeline ever since. It produces gasoline and diesel, heating oil, kerosene and other products, from 12 million tons of crude oil.