Big growth, big plans

Oil-sector company Lotos predicts it will post a revenue of zł.13.4 billion for the whole of 2006, which represents a 40 percent increase in comparison to 2005's zł.9.6 billion. However, the expected net profit of zł.657 million is well below last year's result of zł.915 million.

The company says last year's result was increased by the difference between the value and acquisition prices of the newly acquired Petrobaltic and refineries in southern Poland. The slower growth is also due to changes on the market. "Last year the refinery margins were much higher after hurricane Katrina," the president of Grupa Lotos, Paweł Olechnowicz, added.

The company plans to refine over six million tons of oil in its Gdańsk refinery this year, in comparison to 4.8 million tons last year. It also expects to sell 6.6 million tons of fuel products. "This would increase our shares in the market to 25.7 percent," Olechnowicz said. In 2005 Lotos had a 22.8 percent market share. By comparison, in 2001 it held just 14 percent of the market.

Recently Lotos made headlines with the announcement that it is preparing to extract oil from two new Baltic deposits of a total of 16 billion cubic meters. The president didn't disclose how much it would cost to launch extractions from the deposits. "This will depend on the cost of leasing or buying a drilling platform," Olechnowicz said, adding that a new installation costs around $200 (zł.625) million.

But Lotos is not satisfied with the Baltic resources. Olechnowicz hinted that Lotos would like to gain access to resources in Kazakhstan. "In October we will attend oil industry fair in the country and we hope to continue the talks," he said.