The Polish government has no plans of boosting its shareholding in PKN Orlen and Grupa Lotos, but will want to have full ownership of transmission assets and will take action to achieve that goal, Economy Minister Piotr Wozniak told in a press conference on Tuesday. According to the government strategy for the oil sector adopted Tuesday, the Treasury will put the company Operator Logistyczny Paliw Plynnych, created in September 2006, in charge of storage and transmission of fuels. The government also plans to keep the sole ownership of PERN Przyjazn, the operator of the Polish stretch of the Druzhba oil pipeline that runs between Russia and Western Europe. The Treasury plans to sell 30.36% of shares in Petrobaltic as well as leftover shares in refineries Lotos Czechowice, Lotos Jaslo, Glimar to Lotos, which already holds the majority stake in these assets.
Our view: The fact that Treasury does not intend to increase its stake in Lotos and PKN is definitely good news for minority investors fearing an increasing influence of the Polish state in the Polish oil sector. The even more positive decision for us was further privatization of Petrobaltic to Lotos, which is certainly beneficial for the downstream company. In our view it will not just provide full excess to upstream profits of Petrobaltic but also to its financial reserves, which could help financing Lotos’ heavy CapEx program in downstream. We doubt that these developments are already folded in the forecasts, thus a positive market reaction is expected.