A slippery union

Opposition parties last week advised the Law and Justice (PiS) government against rushing to fuse the country's top refiners, PKN Orlen and Lotos, ahead of the early elections next month.

Prime Minister Jarosław Kaczyński's government has long worried that weak local refiners could fall into foreign hands and rumors of an Orlen-Lotos merger have surfaced at intervals. The government has also been increasingly pushing to lessen Poland's reliance on Russian oil and gas. Talks have resurfaced in recent weeks in the run-up to elections but the government is divided over whether to go ahead with the partnership, which is favored by Orlen's management but opposed by Lotos'.

The Treasury Ministry supports the proposed union, which would create a regional goliath in the refining sector worth an estimated zł.30-billion. In order to further merger talks, the Ministry is pushing for the dismissal of Paweł Olechnowicz, chief executive of Lotos, who has publicly questioned the value of such a tie-up. At last week's meeting of Lotos' supervisory board, however, the firm's management said there were no plans to discuss Olechnowicz's status before year's end. 

Opposition politicians have also expressed doubts about the merger. "Matters of this sort should not be decided based on an ideological approach," said Civic Platform (PO) deputy Adam Szejnfeld. "Kaczyński's party wants to create large national giants based on the socialist economy in communist times," he added.

But Szejnfeld, who is expected to become Poland's Minister of Economy if PO wins the election, said the government did not have enough time to make a significant step towards a merger ahead of the election date. (Reuters)