Contradictory signals over PKN Orlen-MOL merger

According to anonymous sources, the governments of Hungary and Poland are to commence negotiations in November concerning the merger of their state-owned oil concerns PKN Orlen and MOL. The source quoted by Reuters yesterday went on to say that the merger will take place in three stages. It will start by an exchange of shares of the two oil concerns, while stage two envisages the formation of a joint venture, in which both companies would control a 50% stake. This company would target servicing foreign markets. Finally, in 2005 or 2006, a complete merger could then come into force. PKN Orlen wants to settle all the details by the end of next year. However, government representatives denied this unofficial information. "The Prime Minister is not going to Budapest in the nearest future. It is currently too early to speak about a potential merger between Orlen and MOL," announced Marcin Kaszuba, the government's spokesman. In related news, yesterday representatives of Russia's Lukoil and Orlen discussed the possibilities of cooperation in the fields of trade and production. (Parkiet, pp. 1, 3; Puls Biznesu, p. 6) A.K.