Page 9 - Euroil Week 49 2019
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EurOil INVESTMENT EurOil
Poland’s oil giant Orlen plans takeover of utility Energa
RUSSIA
PKN Orlen says the takeover will make
it able to compete better nternationally and more resilient to macroeconomic factors.
POLISH state-run oil and gas company PKN Orlen announced on December 5 it is planning to take over another state-controlled energy company, the power utility Energa.
The takeover will allow PKN Orlen to build “a strong group capable of competing on the inter- national market and resistant to changing mac- roeconomic factors. Diversification of revenue sources is part of both our strategy and global trends,” PKN Orlen’s CEO Daniel Obajtek said in a statement. PKN Orlen says the takeover will boost the share of the power segment in the com- pany’s Ebitda from 15% to 30%.
PKN Orlen is offering PLN7 (€1.6) per Energa share, which puts the company’s value at around PLN2.9bn. Energa’s shares closed at PLN6.8, dropping 1.8%, at the end of the day’s trading on the Warsaw Stock Exchange on December 5. Energa’s shares have been trending down since 2017. Their current value has slid nearly 24% this year to date.
Orlen’s shares closed the day at PLN87.6, down 1%. To date in 2019, the company’s stock has fallen nearly 16%.
The Polish state holds a 27.52% stake in PKN
and 51.52% in Energa.
The planned takeover – which Orlen said
would be completed in mid-2020 pending green lights from a number of institutions, including the European Commission – raises questions about Energa’s most controversial project to build a 1,000-MW coal-fired power plant in Ostroleka.
Energa is developing Ostroleka in partner- ship with another utility Enea. The PLN6bn pro- ject has been plagued by difficulties in securing necessary financing, as banks and funds are wary of new coal investment amidst growing concern about climate change.
Orlen has long been linked to a potential takeover of smaller rival Lotos in a bid to create a strong company with international importance and also one that – possibly – would be capable of taking part in Poland’s plans to build a nuclear power plant.
The Orlen-Energa merger, as well as the potential merger of Orlen with Lotos, would also be in line with the ruling Law and Justice (PiS) party’s policy of exerting tighter state control over strategic companies.
Total, Israeli firm in talks on Exxon’s offshore gas project in Romania
ROMANIA
Total had sold a stake in the project to Exxon in 2008.
FRENCH oil group Total and Israeli Delek Group are two of the investors reportedly inter- ested in purchasing the whole 50% stake held by US group ExxonMobil in the offshore natural gas project Neptun Deep in Romania’s Black Sea, Profit.ro reported.
ExxonMobil confirmed at the end of Novem- ber that it was testing the market to sell its 50% stake in Neptun Deep, but said at that time that it didn’t have a buyer.
ExxonMobil reportedly expects $250mn for its 50% stake in the Neptun Deep offshore perimeter that it operates in partnership with OMV Petrom, according to a Reuters report that indicated no official source. The decision seems irreversible since it is part of a broader regional strategy, but improving the investment climate in Romania after the change of the government in Romania might encourage credible investors to replace ExxonMobil.
Exxon is holding talks with two prospective bidders in the US, Profit.ro informed quoting unofficial sources. Total sold the 50% stake in the
Neptun Deep perimeter to Exxon in 2008, which it now wants to buy back. Israeli Delek Group is the main shareholder of the Leviathan project, in which Exxon is also involved.
The Romania state concluded the initial agreement on the exploration of the Neptun Deep perimeter with the French company Elf Aquitaine (later transformed into Total) and Petrom, wholly owned by the Romanian state at that time. Later, in 2008, the French group sold its stake to ExxonMobil.
In 2012, Exxon and OMV Petrom announced a large gas discovery in the Neptun Deep perime- ter. The two groups have invested over $1.5bn in the perimeter’s exploration so far. However, they postponed the decision to invest in developing the project commercially after Romania’s Parliament adopted a new offshore law and the former gov- ernment increased taxation for energy companies.
OMV Petrom told Reuters on December 2 that it is ready to invest billions in Neptun Deep once the new government lifts regulatory barri- ers that put the project on hold last year.
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