Page 7 - EurOil Week 24 2021

EurOil COMMENTARY EurOil

PiS leader Jaroslaw
Kaczynski (C) and
Prime Minister Mateusz
Morawiecki celebrated
in Warsaw.

recently voted through to sit on ExxonMobil’s The positive reception of the consolidation
board or Royal Dutch Shell being told in no plans – with the stock rising 43% so far this year
vague terms by a court it had to almost halve its – eclipses the company being the darling of the
emissions in just under a decade. government and the quite un-business-like con-
Orlen’s strategy does encompass novel- troversies that have come with that status.
ties that the drive to mitigate climate change Orlen has been accused of serving the gov-
is enforcing on the company. As part of the ernment’s agenda of stifling criticism in the
company’s PLN140bn investment drive by media after it took over Polska Press, a publisher
2030 – which includes PLN85bn for renewable of several national and local media last year.
energy and new petrochemical projects, two of The takeover – and Orlen’s weak justifica-
the company’s three growth engines (the third tions for it – provoked questions about whether
being retail) – Orlen plans getting into offshore the United Right government was thus laying
and onshore wind, solar energy, as well as energy ground to secure positive coverage in numerous
storage. local media in the run-up to general and local
The company is also investing in hydrogen elections, both due in 2023.
with first two hydrogen refuelling stations for The company’s CEO, Daniel Obajtek, has
buses and passenger cars in major cities Poznan not escaped controversy, either. Unknown
and Katowice. The stations, as well as a hydro- prior to PiS’s taking over power, Obajtek rose
gen fuel production hub in Trzebinia – which to the top spot in Poland’s business from being
is under construction and will go online by the an elected official in the rural community of
end of the year – mark Orlen’s growing interest Pcim in southern Poland. Recently, the opposi-
in alternative fuels, as burning climate-warming tion-aligned media have been all over Obajtek
fossil fuels is coming under increasing pressure for alleged shenanigans while he was still an
from regulators and financiers. official in Pcim and for his allegedly pot-holed
Orlen plans to announce the strategy for the financial statements, especially with regard to
combined grouping with Lotos and PGNiG in real estate he owns.
the second half of 2021. So far the company’s net take has only dimin-
“The overall strategic direction will prioritize ished under Obajtek, from PLN5.6bn in 2018
investments in the petrochemical, renewable – the year he took over at the company’s helm
electricity generation and retail segments. We – to PLN4.3bn in 2019 and PLN3.4bn last year,
view the broad strategic targets as positive in latterly due to the pandemic. The company’s debt
light of long-term challenges related to energy was PLN12bn in 2020, nearly five times the fig-
transition,” Fitch Ratings wrote. ure for 2019 and twice the 2018 level – an effect
“While the all-share merger is in line with the of taking over Enea’s debt.
financial policy, the updated strategy will still be Nevertheless, analysts tip Orlen’s share price
an important factor driving Orlen’s rating. In to continue rising, at least until there are any
particular capex and shareholder remuneration wider oil industry shifts such as in Opec produc-
plans will be assessed in light of Orlen’s planned tion quotas or shale oil production. “The refin-
focus on retail, petrochemical and renewables ing industry was hit hard during the pandemic
assets amid energy transition as well as the and any event that promises the containment [of
potential for the merged entity to play a signif- the virus] will be immediately discounted by the
icant role in Poland’s bid to reduce reliance on market,” BOS Bank analyst Lukasz Prokopiuk
coal for electricity,” Fitch Ratings added. recently told the newspaper Puls Biznesu. ™

Week 24 17•June•2021 www. NEWSBASE .com P7