Today, Lithuanian Prime Minister Andrius Kubilius met in Vilnius with Ireneusz Fąfara, CEO of ORLEN Lietuva. The purpose of the meeting was to provide an update on the Mazeikiu refinery’s situation and on PKN ORLEN’S plans regarding the future of that investment.

During his discussions with the Prime Minister, Mr Fąfara strongly emphasised that PKN ORLEN had treated its Lithuanian investment very seriously from the very beginning. The expenditure incurred by the Company on the Mazeikiu refinery exceeded USD 3.5bn. The refinery had needed substantial capital expenditure on modernisation work, which had been financed by its Polish owner. Today, the Mazeikiu Refinery is certainly more modern and better managed than it was four years ago. Mr Fąfara also recalled that when the global financial crisis had been at its peak, severely hitting also PKN ORLEN, the Company had fulfilled its obligation to buy the residual shares in ORLEN Lietuva from the Lithuanian government, providing that country’s budget with a substantial cash injection.

Another issue raised during the meeting were the logistical problems facing the refinery since it was acquired by PKN ORLEN. Mr Fąfara confirmed that the overriding objective was to improve the profitability of the Mazeikiu refinery, viewed by its Polish owner and by the owner’s shareholders as an important member of the ORLEN Group, which should be contributing to its value.

ORLEN Lietuva’s CEO informed the Prime Minister that, having regard to the refinery’s profitability and the fact that it represented an important element of the Lithuanian economy, the Management Board of PKN ORLEN had engaged Nomura, an international bank, as its advisor to explore the various scenarios – from maintaining PKN ORLEN’s presence in Lithuania unchanged to full divestment of all of its Lithuanian assets. He also pointed out that, at the current stage of analytical work, none of the scenarios was favoured by the refinery’s owner and that the advisor would be ready to deliver its recommendations in Q4 2010.

Press Office
PKN ORLEN