PKN Orlen stays the course with Mazeikiu

Despite the halting of oil supplies from Russia to the Lithuanian refinery Mazeikiu, PKN Orlen still considers the deal it struck to buy the plant a worthwhile investment. "When preparing our offer, we took into account a number of scenarios for oil supplies ... even if 100 percent of supplies came from the sea, the buying of Mazeikiu would still be profitable," PKN Orlen's president, Igor Chalupec, claims.

Russian pipeline monopoly Transneft halted deliveries to the Lithuanian refinery earlier this month due to what Transneft says was a leak in the Lithuanian branch of the Druzhba pipeline. However, many suspect that the Russian company is punishing Lithuania for selling Mazeikiu to PKN Orlen, or is even trying to force the Polish oil company to withdraw its offer. Representatives of Transneft denied initial rumors that it has plans to permanently close the pipeline.

"We hope that there are no issues not related to business behind the malfunction," Chalupec said. "If it were so, then this would mean that Russia is not a reliable supplier of energy resources," he added.

PKN Orlen's sales revenues jumped from zł.16.7 billion in H1 2005 to zł.24.8 billion in the first six months of this year. Its net profit fell from zł.3.2 billion to zł.1.2 billion year-on-year due to negative goodwill resulting from the acquisition of Unipetrol in H1 2005.