WARSAW, Oct 6 (Reuters) - Lithuanian oil refinery Mazeikiu, owned by Poland’s PKN Orlen PKNA.WA, was forced to cut production to 70-80 percent of capacity due to low margins, Orlen spokesman Dawid Piekarz said.
Mazeikiu refined at 95 percent of its capacity before the cut.
“It is hard to estimate how long the reduction will last. It is only the result of the poor macroeconomic situation,” Piekarz told Reuters.
In addition to weak refining margins, which are a problem across the world, transportation costs are high for Mazeikiu as it is forced to deliver crude by sea to the Klaipedos oil terminal and from there by train to the refinery.
PKN wants to take over control over Klaipedos from the Lithuanian government and build a pipeline connecting it with Mazeikiu in order to improve efficiency.
“At the moment Mazeikiu is losing money. Its profits only come from one-off inventory revaluations,” BZ WBK analyst Pawel Burzynski told Reuters.
PKN Orlen bought into Mazeikiu in 2006, it refined 9.7 million tonnes of oil in 2008.
PKN shares have risen 14 percent this year to 30.3 zlotys, underperforming Warsaw’s main index WIG20 .WIG20, which has gained 20.2 percent. (Reporting by Pawel Bernat, writing by Patryk Wasilewski, editing by Will Waterman)