VILNIUS — The Eastern European business press is rife with speculation that Russia’s state-owned oil giant Surgutneftegaz is looking to swap its shares in the Hungarian oil and gas company MOL with PKN Orlen for control of the Mažeikiai oil refinery.
Surgutneftegaz bought a 21 percent share of MOL for €1.4 billion in Jan. 2009, but the purchase was considered hostile by MOL’s management and the move was fought by Hungary’s industry regulator. Now numerous publications are reporting that Surgutneftegaz appears to be looking to sell the shares — options it has on the table include letting MOL buy [private_supervisor]the shares back, or swapping them with either PKN Orlen or the UK’s Sinoco. PKN Orlen said it has not received such a proposal, although last week it reversed previous denials that it was looking to sell the refinery and admitted that it indeed was. Surgutneftegaz has not commented on the story yet.
Russian energy companies have been on an asset buying binge over the past year, taking advantage of their cash reserves and the economic crisis’ impact on prices.
“Russian upstream oil businesses are naturally interested in assets in the CEE due to attractive market perspectives and potential operational synergies,” Kamil Kliszcz, an equity analyst at BRE Securities in Warsaw told Czech Business Weekly. On Wednesday Gazprom paid €460 million for a 12.5 percent share of Belarus’ Beltransgaz, securing Gazprom a controlling stake.
PKN Orlen looking to sell
Poland’s PKN Orlen has admitted that it was interested in attracting an outside investor to the Mažeikiai oil refinery, its troubled Lithuanian subsidiary.
Beata Karpinska, a PKN Orlen spokeswoman told The Associated Press last week that it was considering a sale of a stake in Orlen Lietuva, the subsidiary that controls the refinery in Mažeikiai and the terminal in Būtingė. It is Lithuania’s largest enterprise.
Russian oil companies have long wanted to obtain control over the Mažeikiai refinery, but they were shut out twice — once in the 1990s and then again in 2006. Disgruntled, the Russians then shut off crude oil supplies to the refinery, citing a pipeline accident in Belarus. Lithuanian inspectors were never allowed to see the damaged pipeline, which Russian officials say is not economically feasible to repair.
The accident has forced Orlen to supply the refinery with crude via the Būtingė terminal, which is considerably more expensive than pipeline deliveries. As a result, the operational margins at the refinery have suffered, and the Poles apparently have acquiesced that, without a Russian partner on board, their multi-billion euro investment in the Lithuanian enterprise will not pay off.
The potential sale has some Lithuanian politicians worried that Russian ownership of the refinery, Lithuania’s largest commercial enterprise, could threaten the small Baltic state’s sovereignty.
— Baltic Reports reporter James Dahl contributed to this article. [/private_supervisor] [private_subscription 1 month]the shares back, or swapping them with either PKN Orlen or the UK’s Sinoco. PKN Orlen said it has not received such a proposal, although last week it reversed previous denials that it was looking to sell the refinery and admitted that it indeed was. Surgutneftegaz has not commented on the story yet.
Russian energy companies have been on an asset buying binge over the past year, taking advantage of their cash reserves and the economic crisis’ impact on prices.
“Russian upstream oil businesses are naturally interested in assets in the CEE due to attractive market perspectives and potential operational synergies,” Kamil Kliszcz, an equity analyst at BRE Securities in Warsaw told Czech Business Weekly. On Wednesday Gazprom paid €460 million for a 12.5 percent share of Belarus’ Beltransgaz, securing Gazprom a controlling stake.
PKN Orlen looking to sell
Poland’s PKN Orlen has admitted that it was interested in attracting an outside investor to the Mažeikiai oil refinery, its troubled Lithuanian subsidiary.
Beata Karpinska, a PKN Orlen spokeswoman told The Associated Press last week that it was considering a sale of a stake in Orlen Lietuva, the subsidiary that controls the refinery in Mažeikiai and the terminal in Būtingė. It is Lithuania’s largest enterprise.
Russian oil companies have long wanted to obtain control over the Mažeikiai refinery, but they were shut out twice — once in the 1990s and then again in 2006. Disgruntled, the Russians then shut off crude oil supplies to the refinery, citing a pipeline accident in Belarus. Lithuanian inspectors were never allowed to see the damaged pipeline, which Russian officials say is not economically feasible to repair.
The accident has forced Orlen to supply the refinery with crude via the Būtingė terminal, which is considerably more expensive than pipeline deliveries. As a result, the operational margins at the refinery have suffered, and the Poles apparently have acquiesced that, without a Russian partner on board, their multi-billion euro investment in the Lithuanian enterprise will not pay off.
The potential sale has some Lithuanian politicians worried that Russian ownership of the refinery, Lithuania’s largest commercial enterprise, could threaten the small Baltic state’s sovereignty.
— Baltic Reports reporter James Dahl contributed to this article. [/private_subscription 1 month] [private_subscription 4 months]the shares back, or swapping them with either PKN Orlen or the UK’s Sinoco. PKN Orlen said it has not received such a proposal, although last week it reversed previous denials that it was looking to sell the refinery and admitted that it indeed was. Surgutneftegaz has not commented on the story yet.
Russian energy companies have been on an asset buying binge over the past year, taking advantage of their cash reserves and the economic crisis’ impact on prices.
“Russian upstream oil businesses are naturally interested in assets in the CEE due to attractive market perspectives and potential operational synergies,” Kamil Kliszcz, an equity analyst at BRE Securities in Warsaw told Czech Business Weekly. On Wednesday Gazprom paid €460 million for a 12.5 percent share of Belarus’ Beltransgaz, securing Gazprom a controlling stake.
PKN Orlen looking to sell
Poland’s PKN Orlen has admitted that it was interested in attracting an outside investor to the Mažeikiai oil refinery, its troubled Lithuanian subsidiary.
Beata Karpinska, a PKN Orlen spokeswoman told The Associated Press last week that it was considering a sale of a stake in Orlen Lietuva, the subsidiary that controls the refinery in Mažeikiai and the terminal in Būtingė. It is Lithuania’s largest enterprise.
Russian oil companies have long wanted to obtain control over the Mažeikiai refinery, but they were shut out twice — once in the 1990s and then again in 2006. Disgruntled, the Russians then shut off crude oil supplies to the refinery, citing a pipeline accident in Belarus. Lithuanian inspectors were never allowed to see the damaged pipeline, which Russian officials say is not economically feasible to repair.
The accident has forced Orlen to supply the refinery with crude via the Būtingė terminal, which is considerably more expensive than pipeline deliveries. As a result, the operational margins at the refinery have suffered, and the Poles apparently have acquiesced that, without a Russian partner on board, their multi-billion euro investment in the Lithuanian enterprise will not pay off.
The potential sale has some Lithuanian politicians worried that Russian ownership of the refinery, Lithuania’s largest commercial enterprise, could threaten the small Baltic state’s sovereignty.
— Baltic Reports reporter James Dahl contributed to this article. [/private_subscription 4 months] [private_subscription 1 year] the shares back, or swapping them with either PKN Orlen or the UK’s Sinoco. PKN Orlen said it has not received such a proposal, although last week it reversed previous denials that it was looking to sell the refinery and admitted that it indeed was. Surgutneftegaz has not commented on the story yet.
Russian energy companies have been on an asset buying binge over the past year, taking advantage of their cash reserves and the economic crisis’ impact on prices.
“Russian upstream oil businesses are naturally interested in assets in the CEE due to attractive market perspectives and potential operational synergies,” Kamil Kliszcz, an equity analyst at BRE Securities in Warsaw told Czech Business Weekly. On Wednesday Gazprom paid €460 million for a 12.5 percent share of Belarus’ Beltransgaz, securing Gazprom a controlling stake.
PKN Orlen looking to sell
Poland’s PKN Orlen has admitted that it was interested in attracting an outside investor to the Mažeikiai oil refinery, its troubled Lithuanian subsidiary.
Beata Karpinska, a PKN Orlen spokeswoman told The Associated Press last week that it was considering a sale of a stake in Orlen Lietuva, the subsidiary that controls the refinery in Mažeikiai and the terminal in Būtingė. It is Lithuania’s largest enterprise.
Russian oil companies have long wanted to obtain control over the Mažeikiai refinery, but they were shut out twice — once in the 1990s and then again in 2006. Disgruntled, the Russians then shut off crude oil supplies to the refinery, citing a pipeline accident in Belarus. Lithuanian inspectors were never allowed to see the damaged pipeline, which Russian officials say is not economically feasible to repair.
The accident has forced Orlen to supply the refinery with crude via the Būtingė terminal, which is considerably more expensive than pipeline deliveries. As a result, the operational margins at the refinery have suffered, and the Poles apparently have acquiesced that, without a Russian partner on board, their multi-billion euro investment in the Lithuanian enterprise will not pay off.
The potential sale has some Lithuanian politicians worried that Russian ownership of the refinery, Lithuania’s largest commercial enterprise, could threaten the small Baltic state’s sovereignty.
— Baltic Reports reporter James Dahl contributed to this article. [/private_subscription 1 year]
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