Page 10 - Euroil Week 19 2020

EurOil PIPELINES & TRANSPORT EurOil
Swedish refiner free of US sanctions after cutting ties with PDVSA
SWEDEN
Nynas was plunged into crisis as a result of the sanctions.
SWEDISH oil refiner Nynas is no longer subject to US sanctions, it said on May 12, announcing that Venezuela’s state-owned PDVSA had shed most of its stake in the company.
Washington slapped sanctions on PDVSA in August 2017 as part of its maximum pressure campaign against the regime of Venezuelan President Nicolas Maduro. Nynas was caught in the crossfire, as the Venezuelan oil producer had a 50.1% stake in the group. Additional US sanctions imposed in October 2019 prevented the refiner from bringing in Venezuelan heavy crude.
The sanctions plunged Nynas into a crisis, leading it to begin restructuring in December after being unable to settle its debts.
PDVSA has now reduced its interest in the enterprise to 15%, Nynas said in a statement, which means sanctions no longer apply. The buyer of the divested stake is an independent Swedish foundation called Nynasstiftelsen. The remaining share of the company is held by Fin- land’s Neste.
“This means an end to many years of having
to carry the unfair burden for a Swedish com- pany of being subject to US sanctions,” Nynas president Bo Askvik said in a statement. “This led to an increasingly deteriorating financial situation, which ultimately forced Nynas into reorganisation at the end of last year.”
Nynas’ focus now is on finishing its restruc- turing, returning to normal trading conditions and securing long-term financing, he said. It has no intention of buying any further Venezuelan oil, the company told Reuters.
The company owns refineries in Nynashamn and Gothenburg in Sweden and Hamburg in Germany. It also operates the Eastham process- ing plant in the UK through a joint venture with Royal Dutch Shell. It produces base oils, bitu- men, process oils, transformer oils and tyre and rubber oils.
Nynas has agreed to notify the US Treasury Department’s Office of Foreign Asset Control (OFAC) of any future changes to its sharehold- ers and its board members, as long as PDVSA remains sanctioned. It is unclear how PDVSA was compensated for the sale of its stake.™
PERFORMANCE
PKN Orlen swings to Q1 net loss
POLAND
PKN Orlen suffered upstream impairments.
POLAND’S state-controlled refiner PKN Orlen posted an attributable net loss of PLN2.24bn (€490mn) in the first quarter, the company said on May 6.
The result is a major negative change from an attributable net profit of PLN849mn in the first quarter of 2019 and also a net gain of PLN772mn in the fourth quarter.
The net loss comes on the back of PLN2.5bn of impairments that the company had to take in connection to the COVID-19 (coronavirus) pandemic, Orlen said.
Impairments were in the upstream segment’s non-current assets, the company said. Orlen also had to write down inventories to current prices in the first quarter – which suffered a sharp decline because of the coronavirus pandemic.
“Factoring out the impairment losses and write-downs, the company’s net profit was PLN300mn,”Orlensaid.
Broken down by main segments, Orlen’s posted a gain of 133% y/y gain in upstream, with Ebitda Lifo going up to just over PLN1.1bn before impairment. Ebitda Lifo also expanded 4.4% y/y to PLN706mn in the retail segment. In downstream the indicator fell 37.8% y/y to
PLN901mn.
With impairment, however, the upstream
segment saw its Ebitda Lifo post a loss of PLN277mn. Earning in downstream fell 37.6% y/y to PLN897mn. Only retail remained in the black with earnings growing 3.5% y/y to PLN702mn.
Meanwhile, Orlen is in the process of taking over smaller rival refiner Lotos, also a state-con- trolled company, in a bid to create a larger player in line with the Polish government’s ambitions to control companies with some international weight.
Orlen offered the European Commission, which is overseeing the deal via its anti-trust bureau, to sell some of its assets as well as offer competitors or cus- tomers access to technology or facilitating supply deals, Reuters reported on May 6.
Orlen first said it was planning to take over Lotosin2018.Buttheprocesshasprotracted,as Orlen’s rivals such as BP and the EU anti-mo- nopoly authorities raised objections that the deal would lead to Orlen’s acquiring too big a role on a number of CEE markets, including, aside from the home market Poland, Czechia, Latvia, Lithuania, Estonia, and Slovakia.™
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