- Mergers & Acquisitions
Saudi Aramco to acquire downstream assets in Poland
The Saudi Arabian Oil Company (Saudi Aramco) is expanding its global downstream presence with investments in Poland’s refining, wholesale, and jet fuel marketing segments.
Saudi Aramco will buy a 30% stake in Lotos Asfalt, one of the largest manufacturers of bitumen in Europe which also owns the Lotos oil refinery in Gdansk, Poland, in a deal including a fixed payment of PLZ1.15 billion (USD289.2 million) and variable elements. It will also acquire 100% stakes in an associated wholesale business and 50% in a jet fuel marketing joint venture with bp.
Completion of the transaction is subject to regulatory approvals, including from the European Commission.
The agreement with Saudi Aramco marks a key milestone for the regulatory clearance of Polish refiner and fuel retailer PKN Orlen’s intended acquisition of Grupa Lotos, a vertically integrated oil company based in Gdańsk, Poland. The Lotos takeover could be completed in late June or early July.
The investments will widen Aramco’s presence in the European downstream sector and further expand its crude imports into Poland, which aligns with PKN Orlen’s strategy of diversifying its energy supplies.
If the acquisition is finalised, PKN Orlen will guarantee, under a long-term agreement, crude oil supplies from Saudi Aramco at the level of 200 to 337 thousand barrels per day. It is estimated that post-merger this would cover up to 45% of total oil demand from the entire ORLEN Group, in Poland, Lithuania and the Czech Republic.
In addition to the investments, Saudi Aramco has signed a memorandum of understanding (MoU) with PKN Orlen and SABIC, one of the world’s largest petrochemicals companies, to explore joint opportunities in Poland and elsewhere in Central and Eastern Europe. Another MoU was signed by Aramco and PKN Orlen which focuses on exploring potential opportunities for research and development.
“These acquisitions will support the diversification of Aramco’s product portfolio across the hydrocarbon value chain — including a focus on liquids-to-chemicals pathways. Our expanding global network of refineries and chemical joint ventures allows us to reach new markets with our products, and strategically place crude oil volumes across different geographies. Our business objectives for oil and chemicals are closely aligned with PKN Orlen, and we are exploring additional opportunities in the European petrochemicals market, as well as in R&D,” said Mohammed Al Qahtani, Saudi Aramco senior vice-president of Downstream.
“This is an historic day for the Polish energy industry. The completion of the merger is an opportunity to ensure high-quality crude oil supplies to Poland from Aramco. This is a key stage in building a strong multi-utility group that delivers diversified and reliable energy to Poland. Such international partnerships are essential for building the largest multi-utility group in this part of Europe,” said Daniel Obajtek, president of the PKN Orlen Management Board.
In addition, MOL Group, a leading integrated Central Eastern European oil and gas corporation headquartered in Budapest, Hungary, signed a set of agreements with PKN Orlen and Grupa Lotos covering the sale and purchase of several portfolio elements within Consumer Services. Accordingly, MOL acquired 417 service stations in Poland including 270 company-owned sites with a country-wide coverage and the potential to reach a top three position in the local fuel retail market. An additional long-term agreement provides motor fuel supply for the acquired network in Poland at competitive terms.