Energy 9 May, 2023 7:25 am   
COMMENTS: Joanna Słowińska

Orlen wants to drop Russian oil in Czechia and bashes Germany for Kazakhstan


Daniel Obajtek, the President of PKN Orlen, gave an interview to the Financial Times, in which he reveals preparations for the abandonment of Russian oil in the Czech Republic and criticizes the import of oil from Kazakhstan to Germany through Russian territory.

The head of Orlen said that the cost of abandoning oil from Russia is about USD 27 million per day due to the difference between its price and alternatives of about USD 30. “I wouldn’t call it a loss. It is a matter of not supporting Russia. This is a market cost that applies to any company that does not import oil from Russia,” he said.

Daniel Obajtek admitted that the Czech refinery in Litvinov still receives Russian oil through the southern thread of the Friendship Oil Pipeline. “The complete replacement of Russian oil requires improving the logistics of oil supplies, which we are working on with the Czech government,” he told The Financial Times. The Poles terminated the contract with Rosneft at the end of January 2023 and with Tatneft in the spring of the same year after the Russians had stopped deliveries at the end of March, giving no reasons, but offering grounds to terminate the contract.

The Financial Times has established in an interview with two diplomats that the eleventh package of EU sanctions may end the exemption for the northern strand of the Friendship Oil Pipeline from the embargo on supplies to the European Union. This is a route through Poland and Germany, which no longer carries Russian commodities.

Germany uses it for supplies from Kazakhstan, but physically that is Russian oil. “The German side should take a long hard look at the morality of what it is doing,” the Orlen CEO said. Germany does not pay the Russians to ship oil from Kazakhstan through the Friendship, instead this is done by Kazakhstan’s KazTransOil, which can include these costs in the price of deliveries to the German market. Despite that, Orlen is interested in the German market. “We already have 600 gas stations there and we are not going to stop there, but we can also offer a diversification alternative in the German refining sector,” Obajtek said. The media is speculating about the company’s interest in the Schwedt refinery, whose majority shareholder is currently Rosneft Deutschland, a company placed under sanctions. The Poles demand that Schwedt be derusified, but the Germans continue to insist on the board of trustees, which may be extended during the holidays.

According to Daniel Obajtek, the Russian side is still able to find holes in the sanctions policy and sell oil products in Europe, despite the embargo that has been in place since December 2022. “In conclusion, I believe that the sanctions should be harsher. This should not be just a trick to improve Europe’s image in the media,” said Obajtek. “Russia does not sell oil and natural gas, but continues to trade oil products in Europe. This ensures margins not only on hydrocarbons, but also on their processing, not to mention fertilizers and other products, ” he added.

The Financial Times / Wojciech Jakóbik