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The ORLEN Group’s transformation charted around renewables and petrochemicals

The path of Poland’s oil refiner and petrol retailer ORLEN Group’s transformation until 2030 has been charted around renewable energy and advanced petrochemicals.

Business diversification efforts will be driven by maximised profits from the Group’s existing core business, to be transformed based on new technologies, in line with the emerging environmental and consumer trends. Delivery of the ORLEN2030 strategy will further diversify the Group’s revenue sources, in line with its long-term objective of net-zero carbon emissions by 2050.

Another strategic plan is to return to a progressive dividend policy, with a dividend of at least 3.5 złoty (0.78 euros) per share starting from next year.

“We are opening a new chapter in the ORLEN Group’s history,” said Daniel Obajtek, President of the PKN ORLEN Management Board. “The directions of change are set out in the ORLEN2030 strategy, which is a response to global trends. We are building a new multi-utility group capable of successfully competing at a time of major transformational change. We are fully aware that the business segments being our strongest suit today will require a profound change, for which we are well prepared. Over recent years, we have taken consistent steps to effectively strengthen the Group, preparing it for the imminent transformation. We will spend a total of approximately 140 billion złoty [31 billion euros] on our strategic objectives, which will generate a total of 195 billion złoty [43.5 billion euros] EBITDA over the next 10 years. The diversified business will provide us with financial stability and will enable us to consistently build value for our shareholders. ORLEN2030 will be an effective, integrated company based on clean technologies and zero-emission energy sources.”

In particular, the Group’s transformation into a multi-utility powerhouse will be based around renewable energy and gas-fired power generation, efficient low-emission refining and petrochemical production, upstream production of hydrocarbons and an integrated retail offering.

Source: PKN Orlen 2030 strategy.

The ORLEN2030 strategy incorporates a commitment to the Group’s long-term objective of achieving a net-zero carbon footprint by 2050. The Group’s 2030 CO2 reduction targets are 20 per cent less emissions from its existing refining and petrochemical assets and 33 per cent from its power generation business.

The Group’s key growth area over the next decade will be power generation, based mainly on renewables and supported by gas-fired sources. By 2030, the Group intends to achieve 2.5 gigawatts (GW) of installed RES capacity, including 1.7 GW in offshore wind farms and 0.8 GW in onshore (wind power and solar PV) sources. The Group will also increase the installed capacity of its modern gas-fired power plants from today’s 1.1 GW to 2.0 GW. By 2030, up to 20 per cent of gas used internally by the Group will be produced from its own reserves.

Furthermore, by 2030, around half of the Group’s profits from crude oil processing will be derived from the petrochemical business. Expansion of the existing portfolio and entry into new business areas will help entrench the Group’s position as a leading petrochemical producer in Central Europe.

Until 2030, also refining will remain an important segment of the Group’s business. Its transformation will be driven by energy efficiency improvements, increased crude conversion rates and integration with Grupa LOTOS, the Group’s major domestic peer. Expansion of the biofuel and hydrogen fuel output will be another vital driver. Within the coming decade, the Group will emerge as the region’s leading producer of biofuels (including 2G biofuels), with an annual capacity of 2m tonnes. As part of the ORLEN2030 strategy, work will be continued on the Group’s hydrogen hub projects in Włocławek and Płock and steps will be taken to launch green hydrogen production.

Finally, the ORLEN2030 strategic vision is to vigorously develop the retail arm, based on the network expansion and significant additions to the retail offering. By 2030, the number of ORLEN-branded petrol stations operating throughout Central Europe will be at least 3,500. The retail network will be expanded mainly on foreign markets, with the share of foreign locations up from the current 37 per cent to 45 per cent. The Group will seek to enhance the availability of alternative fuels, by deploying at least 1,000 EV fast chargers and increasing the sales of hydrogen and LNG/CNG.

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