Refined ambitions
Last year proved a banner year for Polish oil giant PKN Orlen and, with 2007 just begun, it already has a lot on its plate.
In December the firm concluded its takeover of Lithuanian Mazeikiu Nafta, the Baltic countries' sole refiner, in a deal worth around $2.3 (zł.6.64) billion. The transaction for the refinery, previously owned by Yukos, did not lack for drama - the Russian Druzhba pipeline, Mazeikiu's primary supply line, was shut down at mid-year, ostensibly for repairs, and an October fire sorely damaged the facility.
Nevertheless, PKN Orlen's president, Igor Chalupec, remains optimistic. "I hope that Mazeikiu's impact on the PKN Group's results this year will be positive. But it will be difficult and will depend on the pace at which the burned down installation will be rebuilt," he told Reuters in an interview.
Indeed, early estimations of the firm's 2006 results give cause for optimism. "I expect the fourth quarter will be weaker than earlier quarters," said Chalupec. "But even despite the weaker last quarter, we could see a record year on the operating level after excluding the effects of negative goodwill on 2005 results," he added.
This year Orlen, which already controls Czech oil processor Unipetrol, plans to extend its influence in the region, and the concern's president has indicated an interest in the privatization of Serbia's state-owned oil monopolist NIS, set to take place this year. "I can't rule out that if we see the opportunity for acquisitions in the Balkans and Romania or for boosting our share in the home markets we will make use of it," Chalupec said. "We will be looking at the privatization of NIS, but in that case the schedule will be decided by the seller," he continued.
According to Chalupec, market conditions may be less favorable this year, though its activity in the petrochemicals sector could benefit from a more positive environment.
"We expect greater stability of refining margins, although their average level and [Ural/Brent] differential could be lower than last year," he said. He also said he expected oil prices to vacillate in the $55-65 (zł.158-187) per barrel range this year. (Reuters)
