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INTERVIEW-PKN Orlen in talks to buy Eni stake in Czech refiner -minister
April 14, 2014 / 11:36 AM / 4 years ago

INTERVIEW-PKN Orlen in talks to buy Eni stake in Czech refiner -minister

PRAGUE, April 14 (Reuters) - Polish oil firm PKN Orlen is in talks to buy Italian firm Eni’s stake in the Czech Republic’s sole refiner, the Czech industry minister said, a step that could lead to more investment and help secure its future.

The sale of Eni’s 32.4 percent would give local PKN unit Unipetrol full ownership of Ceska Rafinerska after it also bought a 16 percent stake from Shell earlier this year for $27 million.

“(Eni) is negotiating with PKN Orlen on the conditions for it to exit Ceska Rafinerska,” Czech Industry Minister Jan Mladek told Reuters in an interview on Monday. “We expect that PKN Orlen will negotiate this.”

PKN Orlen could not immediately be reached to comment. Eni declined to comment.

Unipetrol has reported net losses for the past three years including impairments on its refining assets, hurt by the overcapacity in Europe’s refining sector.

It plans to become profitable by investing $1 billion in the coming years in plant upgrades and new projects that would more closely integrate its refining and petrochemical businesses.

The state wants the investment in modernisation to help keep Ceska Rafinerska’s two plants open and the Czech Republic’s energy needs secure. A plan under the previous centre-right government last year had considered that the state could buy into the refiner.

Czech newspaper Hospodarske Noviny reported last week that PKN Orlen had met with Mladek to propose merging two state-owned companies - crude pipeline firm Mero and oil products pipeline operator Cepro - with Ceska Rafinerska to create one company in which the Polish group would have a controlling stake.

Mladek, part of a centre-left cabinet in power since January, said PKN Orlen had presented him a proposal but declined to say what that was or provide any details.

He said he would like to see more investment in Ceska Rafinerska’s two refineries.

“If (under-investment) continued, the refineries would become very unmodernized and ineffective and would be threatened with closure,” Mladek said. “That is a long-term problem.”

Ceska Rafinerska runs refineries in Litvinov and Kralupy that process 8.7 million tonnes of crude oil per year. (Writing by Jason Hovet; editing by Jane Baird)

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