PKN Orlen may bid on the Latvian government’s 39% stake in Ventspils Nafta Terminals, Latvia's largest oil port, Company executives told to the Latvian Economy Minister yesterday according to Bloomberg. According to the Latvian Minister, there are at least seven companies interested in bidding. The government aims to sell its holding via an auction of the Riga Stock Exchange for at least US$70m, before the general elections held on 7 October. The Ventspils terminal exports Russian crude oil, but its importance had decreased since Russia cut the pipeline supply of this terminal, and delivers crude oil only via train.
Our view: We see the PKN’s intention as slightly negative as we believe investing into the terminal does not belong to the core business of PKN Orlen.