USD 1.6 billion within six years – these are the costs of ‘value building’ at Mazeikiu refinery, PKN Orlen estimates. So far, the Polish fuel giant has spent USD 2.5 billion for its Lithuanian project. The company’s management have admitted that in order to revive former capacity, modernize and improve effectiveness of Mazeikiu refinery, the company will have to cut Polish projects.
“It may be so that Lithuanian investments will be connected with cutting investments in the Polish part of our group”, Pawel Szymanski, deputy CEO for finances said.
He refused to say how big the cuts would be and what part of operations they would include.
However, PKN Orlen is limiting its activities connected with looking for oil. The recent attempt to conduct exploration works in Kazakhstan has ended with a fiasco.
“Our policy will be less aggressive here. In the updated strategy, we won’t give certain date of getting access to our own fields nor the expected annual exploration”, Piotr Kownacki, PKN Orlen CEO admitted.
The company considers possibilities on the Lithuanian and Latvian shelf and on Swedish sea.
‘Value building’ at Mazeikiu was supposed to cost USD 0.8-1 billion. However, two unexpected events changed the situation completely. First, there were delivery cuts in Przyjazn pipeline (allegedly arranged by Russians). That’s why a new pipeline is being planned to be built. The second negative event is the fire which dramatically reduced the capacity of the refinery.
“We will first see to regaining capacity at Mazeikiu. It will be conducted this year and make the refinery profitable again. Then the following things are planned: thorough modernization of the plant and improving its effectiveness. We also want to start production of new products”, Krystian Pater from PKN Orlen said.