EC approves Saudi and Hungarian firms as buyers of stakes in Lotos

Leszek Szymański/PAP

The European Commission (EC) has approved Saudi Aramco and Hungary’s MOL as buyers of some assets in connection with the merger of Poland’s dominant oil and gas company, PKN Orlen, with its smaller local peer, Lotos, the EC vice-president has said.

On July 14, 2020, the European Commission approved, under the EU Merger Regulation, the acquisition of Grupa Lotos by PKN Orlen. The approval was conditional on full compliance with a commitments package offered by PKN Orlen, EC Commissioner for Competition Margrethe Vestager told PAP.

According to the EC, PKN Orlen had to fulfil its obligations and sell a 30-percent stake in the Lotos refinery and an 80-percent stake in Lotos' petrol stations. The goal was to avoid a PKN Orlen monopoly.

On July 20, 2022, Vestager said that these commitments will "ensure that the relevant Polish markets remain open and competitive and that the merger will not lead to higher prices or less choice for fuels and related products for businesses and consumers in Poland."

On January 12, 2022, PKN Orlen announced that it had decided to sell a 30-percent stake in Lotos's Rafineria Gdanska to Saudi Aramco and 417 Lotos petrol stations in Poland to Hungarian oil and gas company MOL.

Additionally, PKN Orlen also signed a long-term contract with the Saudi Arabian company for oil supplies of between 200,000 and 337,000 barrels per day.

In December, 2022, the Civic Platform, Poland's main opposition party, filed a notification with the prosecution suggesting that crimes could have been committed in the Saudi Aramco deal.

The nationwide daily Gazeta Wyborcza wrote at that time that "the sale by Orlen of a part of Lotos to Saudi Aramco went through with a violation of the law on control of selected investments."

According to the newspaper, "special services were not allowed to scrutinise the transaction despite the fact that Saudi Aramco cooperates with Putin's Russia."

In late December, the Gdansk refinery was added to the list of entities subject to special protection by the state after concerns had been raised that the Saudi share could pose a security threat to Polish fuel supplies.