Lotos blazes a biofuel path
"We will make decisions on the preparations for bio-fuel production at some point in the third quarter," said the company's CEO, Paweł Olechnowicz.
The Czechowice refinery is producing fuels, oil, and industrial petrol. Grupa Lotos is following its strategy for the coming years. The key elements of the program that were realized this year were modernizing the technological installations in the Gdańsk refinery and increasing production capacities. For example in recent days the Gdańsk refinery has been refining 16,500 tonnes of oil daily. At the end of last month Lotos signed a contract on building a Merox installation for the production of airborne fuel JET A1. Lotos has also acquired a chain of Esso petrol stations from Exxon Mobil. Now, the company has decided to respond to the market's growing demand for bio-fuels.
In light of jumping oil prices Lotos' decision might prove a success. Mass production of bio-fuels is becoming more and more feasible and more car producers are also offering bio-fueled cars, especially in the US. Recently the German DaimlerChrysler has announced that the company will start production of diesels. Contrary to oil, biofuels, of which ethane is the most popular, are a renewable source of energy. Although they are most in demand in the US, bio-fuels will also flow into the European market, after the EU issued a directive in 2003 saying that by 2010 5.75 percent of all fuels being sold will have to be based on renewable sources. Sugar company Krajowa Spółka Cukrownicza is also considering switching production at several of its plants, which are due to be shut down, to biofuels.
Production of biofuels in Czechowice is not Lotos' first step in the section of ecological fuels. In 2003 Grupa Lotos SA, as the first oil producer in Poland, launched diesel containing 0.001 percent of sulfur, thus fulfilling the EU regulation that will come into force in 2009.
In 2004 the net profit of Lotos' capital group was zł.572 million. Sales income reached zł.10,283 million. According to Lotos prognosis, the company's consolidated net profit will reach zł.404 million. So far, after the first two quarters of 2005, Lotos has only arrived at zł.141 million. Thus, most probably the company will have to adjust its forecasts.
