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Further steps taken by PKN ORLEN to acquire PGNiG

Poland’s oil and gas retailer PKN ORLEN has begun work on a merger control submission to the European Commission regarding its intended acquisition of the PGNiG Group, Poland’s incumbent gas supplier.

The acquisition would mark an important stepping stone in PKN ORLEN’s efforts to build a single multi-utility group with a strong position in Europe and global coverage.

“At a rapid pace, we are now setting to work to take over the PGNiG Group,” said Daniel Obajtek, President of the PKN ORLEN Management Board. “We have extensive experience with such deals, combined with unique skills in running major investment projects and adequate financial capabilities. […] Following our integration with the PGNiG Group, we will become a full-fledged player in the European energy top league, alongside regional powerhouses, which have long been reaping business benefits from their own consolidation processes, such as Italian Eni and Spanish Repsol.”

The confidentiality agreement between PKN ORLEN and the PGNiG Group represents another step, after the Letter of Intent signed with the State Treasury earlier in July.

Following the integration of PKN ORLEN, ENERGA Group, LOTOS and PGNiG assets, the total annual revenue of the new group would reach some 200 billion zloty (around 44.6 billion euros).

PKN ORLEN’s transactions, including its planned acquisition of the PGNiG Group, are in line with prevailing global trends. The world’s largest fuel companies have long built integrated value chains based on oil and gas production, state-of-the-art power generation and expansion of their retail muscle, including BP, Total, Shell and Equinor.

The ORLEN Group’s plan is to become a business leader of the energy sector’s sustainable transformation in the CEE region. In the upstream segment, the consolidation would enhance the combined entity’s operational efficiency and capacity to deliver capital investment projects, enabling it to focus on the most prospective natural gas and crude oil assets held by both companies in Poland and Europe. In the case of power generation, an integrated portfolio would be created in Poland based on high-efficiency CCGT units and renewable energy sources, including offshore wind power generation. In this context, the balancing potential of CCGT units to offset the irregular generation profile of renewable energy sources would play a vital role. At the same time, a wide-ranging portfolio of assets under the group’s management would optimise wholesale trading in electricity.

Customers would be the ultimate beneficiaries of the creation of a multi-utility group. Leveraging its combined capabilities, the group would be able to offer a broader portfolio of attractive fuel, gas and energy products and services.

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