Page 4 - FSUOGM Week 02 2021

FSUOGM COMMENTARY FSUOGM

Aramco eyes opportunities

in Russia’s backyard

Saudi Arabia has an opportunity to seize market share away from Russia in

Poland, which is eager to diversify its supply mix

SAUDI ARABIA SAUDI oil giant Saudi Aramco is reportedly shortlisted by the end of the first quarter. Hunga-
eyeing a 30% stake in Polish firm Lotos’ 210,000 ry’s MOL had previously been seen as a favour-
WHAT: barrel per day (bpd) refinery in Gdansk – a move ite to acquire the assets, although Aramco is also
Saudi Aramco is that could help expand its oil market share in understood to be in the running.
reportedly eyeing a stake Central Europe. PKN Orlen’s relationship with Aramco
in Lotos’ 210,000 bpd Polish refiners have traditionally relied began in April 2016, when the company
refinery in Gdansk. mainly on Russian Urals grade crude, but they struck a long-term deal to take 200,000 tonnes
have taken steps in recent years to diversify sup- (1.47mn barrels) of oil per month from the
WHY: ply, reaching out to Saudi Arabia and other Mid- supplier. The pair agreed to expand shipments
The investment would dle Eastern producers. Besides securing the best to 300,000 tonnes in 2018, and PKN Orlen
give Aramco greater price, these moves are political. Poland is also also signed a contract for up to an additional
reach in the Polish aiming to phase out Russian gas imports over the 800,000 tonnes of Saudi crude over a six-
oil market, which is coming years in light of its sour relationship with month period last year.
dominated by Russia. Moscow, replacing them with LNG and Norwe- “This is not a great investment for Aramco
gian pipeline deliveries. in a purely business sense, with downstream
WHAT NEXT: Lotos is due to be acquired by its larger Polish profits falling and Asian rivals growing,” Robert
Refiners face further counterpart PKN Orlen, as part of Warsaw’s plan Tomaszewski at Warsaw-based think-tank Pol-
margin pressure after to establish a national energy giant. The Euro- ityka Insight commented in an interview with
Saudi Arabia’s surprise pean Commission cleared the deal in July, but Deutsche Welle in late December. “But it would
decision to take 1mn bpd only on condition that PKN Orlen shed some give the company a new refining installation, and
of supply off the market. assets, including a 30% interest in the Gdansk is open to the sea, opening up the Baltic and close
plant. to Germany’s terminals at Schwedt and Iuna. The
According to Polish press reports, poten- key, however, is that this is Rosneft’s backyard
tial buyers for Lotos’ assets are expected to be and that would be a game-changer.”

P4 www. NEWSBASE .com Week 02 13•January•2021