Polish Briefing 21 August, 2019 9:00 am   
Editorial staff

Polish Briefing: Lotos still counts its losses after the contaminated oil crisis

What goes on in Poland on the 21st of August.

Lotos will pass dry-shod

Deliveries of contaminated Russian oil sent via the Druzhba pipeline did not affect the functioning of Grupa LOTOS and refinery installations. The Gdańsk group will demand compensation for interruptions in oil supplies. Mateusz Aleksander Bonca, CEO of Grupa LOTOS pointed out this situation shows that in operational and commercial terms Lotos and its Gdańsk refinery are able to safely pass through market challenges.

Jarosław Kawula, Vice-President of the Management Board for Production at Grupa LOTOS, emphasized that these events did not significantly affect the work of the Gdańsk refinery. – It has not changed its load significantly. In the second quarter, it produced 2,5 million tonnes of products. It’s a very similar level to the one we achieved in the same period last year – he said.

– The market did not feel that we had problems with oil supplies. This is proof that the storage and transmission system turned out to be efficient enough with raw material delivered by sea during the crisis. After the crisis is over, we will prepare a report that will include investment options that will help to make the logistics of supplies for Lotos even more flexible – he added.

After suspending pipeline supplies, Lotos had to receive its oil by sea. – In accordance with our internal procedure, a crisis team was established, within which a team operates, which counts the additional costs generated. At present, we do not know what they ultimately amount to. The invoice is not closed. Until it is closed, it is difficult to talk about the entire distribution, we have notified suppliers that such distribution will be issued to them – he said. According to Kawula, contaminated oil that went to the national transmission and storage warehouse from Russia still partly remains in it. – PERN prepares appropriate oil blends that will allow it to meet all quality requirements when mixed with clean oil. Such oil is processed safely in the refinery – he said.

“Temporarily suspended Druzhba”

Information on the transmission of contaminated oil via the Druzhba pipeline appeared on April 19. To protect the transmission system and refinery installations, Belarus, Ukraine and Poland have suspended the reception of crude oil sent via Druzhba. Deliveries to Poland resumed on June 9. PKN Orlen will also be seeking compensation. In mid-June, company president Daniel Obajtek announced that the Russians recognized the right to compensation for the transmission of contaminated oil. Orlen intends to demand compensation also for limitation of supplies of this raw material. The Płock company also does not disclose the number of claims. They are to be known within a few weeks.