Naftobazy privatization may be postponed

The privatization of Naftobazy oil storage group may be postponed once again due to outstanding ecological issues and the possible loss of key customer PKN Orlen. Over the next two decades the company, which currently owns and operates 60% of the country's oil storage facilities, will have to pay for the demolition and clean-up of 400 obsolete oil tanks at the request of energy sector regulator URE. However, the total cost of the clean-up remains unknown. Additionally, Naftobazy's future investor will have to spend about $200 million on new plant upgrades. At the same time, the company's main customer, oil distributor PKN has recently started construction of huge underground oil tanks at the Solino salt mine near Inowrocław in Central Poland and said it would like to renegotiate contracts with Naftobazy. Naftobazy has attracted two potential investors, one being German IV Logistic. (Parkiet, p. 4) J.K.