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Polish Briefing 1 March, 2019 9:00 am   
Editorial staff

Polish Briefing: The Orlen-Lotos merger will bring more benefits than threats

What goes on in Poland on the 1st of March.

Kowalski: The Orlen-Lotos merger will bring more benefits than threats

– The new entity will be able to compete on the market due to its strong position, provided by the distribution of fuels or the work of the mining sector – said Janusz Kowalski, an expert on energy security in an interview with BiznesAlert.pl.

– The merger will be beneficial for both entities as well as for the entire Polish economy. Thanks to the merger of the mining sector of Lotos with PetroBaltic, which has extensive experience with upstream PKN Orlen, it will allow the creation of a large player, more effectively competing on the international market, also in Central and Eastern Europe – said Kowalski.

Asked whether it would be necessary to sell some of the gas stations of the new entity and whether it would not open a window to the Polish market to MOL, which seems to be one of PKN Orlen’s regional competitors, Janusz Kowalski, reminded that the Hungarians are already present in Poland, through the Slovak oil company Slovnaft. – PKN Orlen also operates where MOL, in Czech Republic or Slovakia – he added.

According to Kowalski, the decision to sell gas stations will depend on the merger model. – Lotos does not distribute too much fuel, so there is a chance that there will be no need to sell part of the station. – In some places where PKN Orlen is expanding abroad, the company is successful in this field. The German market can be an example – he stressed. – There are pros and cons of mergers. In this case, however, there are more pluses. Joint actions of both entities after their merger will allow a new company to become more competitive, for example in the Balkan market. – added.

Asked about the potential reservations of the European Commission under competition law on the market, he reminded that its composition will change in the middle of the year. – The energy in the European Commission is ruled by the Germans and it is up to them to assess whether it will be possible to merge. Such consolidation may not be welcomed in Germany, and it is Germany that has an indirect and direct influence on the European Commission. Therefore, Poles must build such alliances in Europe that will balance Germany’s pressures, “finished Kowalski.