Engaged in continued diversification efforts, PKN ORLEN is reducing crude oil supplies from across Poland’s eastern border

In line with its policy to purchase the feedstock from a diverse supplier base, PKN ORLEN has reduced the volumes sourced from Rosneft Oil Company by approximately 30%, thereby markedly increasing its diversification capacity. According to a recently signed contract, the annual volumes of crude oil bound for the ORLEN refinery in Płock will be between 5.4 and 6.6 million tonnes, with deliveries made from February 1st 2019 to January 31st 2021. Under the contract previously in place, annual supplies were between 6 and 8.4 million tonnes, delivered from February 1st 2016 to January 31st 2019.

– Diversification of crude oil supplies is among the priorities written into PKN ORLEN’s updated strategy. It is extremely important from the point of view of our business, but also for Poland’s overall energy security. The effects of our efforts are already becoming plain to see. In 2018, as much as 30% of the total crude volumes supplied to the ORLEN refinery came from Saudi Arabia, the United Arab Emirates, the US and Africa. Our decision to reduce the volume of crude sourced from the Russian direction is opening up further diversification opportunities. The important thing is to ensure the best possible price terms and quality when contracting oil from new suppliers – says Daniel Obajtek, President of the Management Board of PKN ORLEN.

Still in 2012–2013, the share of REBCO, mostly of Russian origin, in the ORLEN Group’s crude slate was close to 95%. Currently, decisions on the mix of feedstock suppliers to all of the Group’s refineries are informed by in-depth economic analysis to combine secure deliveries with commercial viability. Recently, the Group has signed spot contracts for crude supplies from the US, Angola, Nigeria and the United Arab Emirates.

The ORLEN Group is constantly looking for new markets and expanding both the portfolio of suppliers and types of crude oil processed. Purchase opportunities and the extent to which the ORLEN Group’s existing technologies allow it to process diverse crude oils are monitored on an ongoing basis, taking into account prevailing global trends, including increased demand for finished petroleum products. Selected crude types with properties other than those of REBCO will increase, under specific conditions, the yield of middle distillates, especially diesel oil. Also, REBCO’s deteriorating quality is a factor to be reckoned with.

The ORLEN Group refineries have already run oil delivered under spot contracts from Iraq, Azerbaijan, Kazakhstan, Venezuela, Norway, and the US. Such purchases effectively supplement the Company’s long-term supplies, which include volumes delivered under forward contracts with producers from countries east of Poland and the Persian Gulf.