40th anniversary of the Mažeikiai refinery
The key asset of the ORLEN Group’s ORLEN Lietuva, the Mažeikiai refinery celebrates its 40th anniversary. The refinery is now one of the pillars of the ORLEN Group, generating profits and significantly enhancing energy security in the region. It also forms part of the Group’s integrated production chain. In the last four years, ORLEN Lietuva has earned a net profit of approximately PLN 2.3bn.
‘Today, the Mažeikiai refinery is among the ORLEN Group’s key assets, ensuring Poland’s and the Baltic States’ energy security. Its purchase by PKN ORLEN was possible thanks to the efforts of the late President Lech Kaczyński, who was not only a great friend of Lithuania, but also the author of the concept of security alliance between Poland and Lithuania. The growing importance of ORLEN Lietuva is the effect of implementation of optimisation measures and innovative projects. The company has generated a net profit of about PLN 2.3bn since 2016, which demonstrates our business decisions were correct. The refinery is celebrating its 40th anniversary at a particular moment in time, when we are witnessing an energy revolution. New challenges are emerging in the oil and fuels market, and we are determined to meet those challenges. We will continue to expand the refinery’s potential, reinforcing the company’s position on the European market,’ said Daniel Obajtek, President of the PKN ORLEN Management Board.
The Mažeikiai refinery is the second largest ORLEN Group refinery in terms of throughput (10 million tonnes per annum) and the only refinery in the Baltic States. It covers an area of more than 1,000 hectares, crossed by approximately 2,000 km of pipelines. Since its inception, the refinery has processed almost 330 million tonnes of oil in total. Petroleum products from the Mažeikiai refinery are sold in Lithuania as well as Latvia, Estonia, Poland and other countries. It was supplies from Mažeikiai that covered a spike in demand for fuels in Poland after the grey market in fuels was successfully curbed by the Polish government.
The refinery is important to the Polish and Lithuanian economies. It is Lithuania’s largest company, with about 1,500 employees, of whom over 90% are residents of Mažeikiai and neighbouring towns. It is also the largest exporter and taxpayer in Lithuania, accounting for 15% of state revenues. The refinery is currently in good financial condition, and ORLEN Lietuva keeps delivering profits. But as recently as 2015, when the Civic Platform and Polish Peasants’ Party were in power, it was on the brink of bankruptcy.
Last year, the Lithuanian-based company significantly strengthened its position in the region, also thanks to improved relations between the Polish and Lithuanian governments. February saw the official opening of the restored rail route from the Mažeikiai refinery to Renge, Latvia, which was dismantled by Lithuanians in 2008. The section is almost 20 kilometres long and facilitates delivery of ORLEN Lietuva’s products to Latvia and Estonia via a shorter route, helping to optimise transport costs.