6/06/2007

Poland's Lotos targets efficiency, to up non-Russian supplies

Grupa Lotos, Poland's number two refiner, on Tuesday announced plans to up the share of oil it gets by sea to 15 pct this year from 10 pct in 2006, and to make it one of Europe's top five oil firms by efficiency.

'In three years we want to be in the top ten, maybe top five most efficient European refineries,' Lotos CEO Pawel Olechnowicz told a news conference, adding the company will compare itself to over 60 other European players via operating profit margins or debt to capital ratio.

Lotos plans to invest a total of 7.3 bln zlotys in 2007-2012 in new technology and upping its market share, as well as diversifying oil resources, 90 pct of which now comes from Russia.

By 2012 the refiner wants to reduce its dependence on Russian crude to no more than 60 percent. Lotos, owner of 69 pct of Poland's Baltic Sea oil rig operator Petrobaltic, also buys oil from Kuwait and the North Sea.

Lotos also plans to buy out the rest of Petrobaltic shares from the state in 2008, and to franchise out all of its gas stations to private dealers by the start of next year.

''I care more about what is mine' -- that's the idea. Competition is directed at lowering costs, and if we don't go in this direction, we will lose our clients,' Olechnowicz said.

The company, however, has suspended plans to build an Integrated Gasification Combined Cycle (IGCC) plant to process heavy petroleum residues. Lotos now plans to use the residues to produce asphalt -- a premium product as Poland embarks on a road-building programme ahead of the Euro 2012 football championships.

Source: forbes.com



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