Government signals new possibilities for oil sector

Treasury Minister Wieslaw Kaczmarek yesterday gave the strongest signal yet that the sale of the Gdansk Refinery (RG) to Russia's Lukoil may be in jeopardy. "A decision on the deal will be made during the next two weeks or so, during which time I expect the Cabinet will debate a revision of the sector restructuring program," Kaczmarek told Radio Zet. This could then open the door for a merger between RG and another domestic oil company. The government appears increasingly worried that allowing a Russian oil major to buy a fifth of the national refining capacity could jeopardize the country's energy security. "Today we have a tough choice to make," said Kaczmarek. The government is viewing the purchase of RG by the Russian consortium as potentially risky, but the Minister stopped short of saying whether approval of the new program would dash chances of the Lukoil-Rotch consortium to buy control of RG, which has throughput capacity of 85,000 barrels per day. The government fears that the alternative of allowing PKN Orlen to buy the refinery could create a new monopoly as PKN would overwhelmingly control the domestic oil market. (Reuters)