Polish Lotos CEO: Sees Merger With Orlen In 3-5 Yrs - Report

Polish Lotos CEO: Sees Merger With Orlen In 3-5 Yrs - Report
DJ
Τρι, 22 Ιανουαρίου 2008 - 02:28
Poland's two oil refiners PKN Orlen (PKN.WA) and Grupa Lotos (LTS.WA) should merge within three to five years as part of a larger tie-up with a European oil major, Lotos Chief Executive Pawel Olechnowicz told the daily Parkiet in an interview published Tuesday.
"If we don't find a way to function as one entity, someone will figure out a way to do it for us," Olechnowicz told the daily.

The executive said in his view, a straight merger of Orlen and Lotos wouldn't be enough as the merged entity would have very limited upstream exposure.

"What's needed is a big partner, which has its own extensive crude oil extraction operations. I think we have three-to-five years to find such a solution," he said.

Olechnowicz said he personally would favor a major European oil company as an investment partner, but didn't specify a particular candidate.

In the early 2000's, there was extensive public speculation about a regional merger between Orlen, Hungarian oil and gas company MOL Nyrt. (MOL.BU), and Austria's OMV AG (OMV.VI), which owns a minority stake in MOL.

However, MOL resisted a tie-up with either OMV and Orlen, which then chose to focus and on expansion in Germany, the Czech Republic, and Lithuania

Poland's State Treasury controls a 58.8% stake in Lotos and is also the largest shareholder in PKN Orlen, where its 27.5% stake and additional indirect holdings via state-owned companies give the treasury effective control over Orlen's supervisory and management boards.

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