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PKN to sell Lotos assets to Aramco, Mol ahead of merger

  • : Crude oil, Oil products
  • 22/01/12

Saudi Arabia's state-controlled Saudi Aramco is poised to re-enter Europe's refining sector after agreeing to buy some of Polish firm Grupa Lotos' assets ahead of its planned takeover by domestic rival PKN Orlen.

PKN today announced a package of asset sales designed to win EU competition approval for the Lotos deal. The pick of them is an agreement to sell Aramco a 30pc stake in Lotos' 210,000 b/d Gdansk refinery for a headline price of 1.15bn zlotys ($255mn). The final price will factor in any debt held by the refinery. Aramco has also agreed to buy Lotos' refined products supply and logistics company in Poland for 1bn zlotys, and a stake in its jet fuel supply joint venture Lotos Air BP Polska.

PKN said it will sign a term contract to buy 200,000-337,000 b/d of crude from Aramco if the Gdansk sale goes through. This could take a sizeable chunk of demand away from Russia, which is Poland's main crude supplier. PKN, which already has a contract for 100,000 b/d of Saudi crude that is renewed on a yearly basis, said if the deal is completed Saudi crude could represent as much as 45pc of its total crude slate. It said it plans to direct the new Saudi supply to several of its refineries, including Plock and Gdansk in Poland, Mazeikiai in Lithuania, and Litvinov and Kralupy in the Czech Republic.

"The investments will widen Aramco's presence in the European downstream sector and further expand its crude imports into Poland, which aligns with PKN Orlen's strategy of diversifying its energy supplies," Aramco said today.

Tracking data show PKN's Saudi term supplies are delivered to the port of Gdansk from storage in Sidi Kerir, Egypt. PKN's refineries also receive pipeline shipments of Russian Urals, along with Caspian, North Sea, US and west African grades. The shift to a higher Saudi intake will likely tighten PKN's reliance on spot purchases.

The proposed Gdansk acquisition is Saudi Arabia's second step in strengthening its marketing foothold in Europe this week. Yesterday, German commodities trader and refiner Klesch Group said it had agreed a deal with Aramco's trading subsidiary ATC for the supply of 110,000 b/d of non-Saudi crude over a three-year period. Unlike Aramco, ATC does not typically trade Saudi crude. It has previously operated crude-for-products supply deals with PKN and Greek refiner Motor Oil Hellas (MOH).

Aramco has focused on Asia-Pacific to grow its international refining footprint in more recent years, but it does have past experience in Europe, having previously owned a stake in MOH. Expanding its presence in Europe's downstream sector will help the firm to optimise its Red Sea-facing terminals, such as Yanbu, Jeddah, Shuqaiq and Rabigh.

Retail sales

Other Lotos assets being divested ahead of the PKN merger are staying in European hands. Hungarian firm Mol has agreed to buy 417 Lotos filling stations in Poland for $610mn. These include 270 owned by retail subsidiary Lotos Paliwa. Mol expects to gain country-wide market coverage and potentially become Poland's third-largest motor fuel retailer as a result of the deal.

Mol said it also signed a long-term fuel supply agreement with PKN for its future Polish retail network. It has no refining assets in Poland, although it owns the 120,000 b/d Bratislava refinery in neighbouring Slovakia. Subject to the Polish acquisition being approved, Mol will divest 144 retail stations in Hungary and 41 in Slovakia to PKN for $259mn, marking the Polish firm's entry into the Hungarian retail market.

Other Lotos divestment deals agreed today include the sale of biofuels subsidiary Lotos Biopaliwa to Hungary's Rossi Biofuel, in which Mol holds a minority stake, and the sale of storage and bitumen assets to Polish trading firm Unimot. The latter deal includes an agreement for Unimot to buy 500,000 t/yr of bitumen from the Gdansk refinery.

PKN said it will present all of these deals to the European Commission within seven days and aims to finalise them within 12 months assuming it receives the EU's approval.


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25/05/08

Permian output could plateau sooner: Occidental CEO

Permian output could plateau sooner: Occidental CEO

New York, 8 May (Argus) — Oil production from the Permian basin could plateau sooner than expected if operators keep talking about reducing activity levels in the wake of lower oil prices, warned the chief executive of Occidental Petroleum. Vicki Hollub said she previously expected to see Permian output growing through 2027, with overall US production growth peaking by the end of the decade. "It's looking like with the current headwinds, or at least volatility and uncertainty around pricing and the economy, and recessions and all of that, it's looking like that peak could come sooner," Hollub told analysts today after posting first quarter results. "So I'm thinking right now the Permian, if it grows at all through the rest of the year, it's going to be very little." Occidental is reducing the midpoint of its annual capital spending guidance for 2025 by $200mn on the back of further efficiency gains. The US independent also plans to trim domestic operating costs by $150mn. "We continue to rapidly advance towards our debt reduction goals, and we believe our deep, diverse portfolio of high-quality assets positions us for success in any market environment," Hollub said. Occidental closed asset sales of $1.3bn in the first quarter and has repaid $2.3bn in debt so far in 2025. Occidental produced 1.4mn b/d of oil equivalent (boe/d) in the first quarter compared with nearly 1.2mn boe/d in the same period of last year. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

HSFO defies the green tide


25/05/08
25/05/08

HSFO defies the green tide

New York, 8 May (Argus) — High-sulphur fuel oil (HSFO), once seen as a fading relic, is proving remarkably resilient (see table) despite the maritime sector's push toward decarbonization. The fuel remains economically attractive thanks to persistent scrubber investments and regulatory frameworks that fail to fully penalize its use. Under the EU notation, HSFO and very low-sulphur fuel oil (VLSFO) are assigned the same calorific and greenhouse gas emission values. This equivalence means that ships fitted with scrubbers — systems that strip out sulphur oxides — face no additional penalties for choosing HSFO over VLSFO. As a result, greenhouse gas fees under FuelEU Maritime and the EU emissions trading system (ETS) offer no disincentive for scrubber users to stick with cheaper HSFO. In March 2025, the VLSFO-HSFO spread in Singapore narrowed to just $44/t, the lowest since the IMO 2020 sulphur cap took effect. At that level, a scrubber on a capesize bulker pays for itself in under two years. When the spread averaged $122/t in 2024, the payback period was about eight months. Even in regulated markets like Europe, economics favor HSFO. Under the EU ETS, ships operating in, out of or between EU ports must pay for 70pc of their CO2 emissions in 2025. In Rotterdam, bunker prices including ETS surcharges still favor HSFO: $575/t for HSFO, $605/t for VLSFO, and $783/t for a B30 Used cooking oil methyl ester blend. While biofuels, methanol and LNG are inching forward in market share, they remain cost-prohibitive. In the meantime, HSFO, with scrubber backing, continues to punch above its environmental weight. By Stefka Wechsler Selected ports marine fuel demand t % Chg 1Q 25-1Q 24 1Q 2025 less 1Q 2024 1Q 2025 1Q 2024 Singapore HSFO 1.0% 33,160.0 4,898,372.0 4,865,212.0 VLSFO/ULSFO -13.0% -1,005,951.0 6,829,667.0 7,835,618.0 MGO/MDO -5.0% -49,012.0 907,874.0 956,886.0 biofuel blends 187.0% 237,552.0 364,418.0 126,866.0 LNG 34.0% 25,935.0 101,856.0 75,921.0 Rotterdam HSFO 1.0% 11,169.0 829,197.0 818,028.0 VLSFO/ULSFO 14.0% 118,670.0 976,249.0 857,579.0 MGO/MDO 3.0% 9,662.0 393,071.0 383,409.0 biofuel blends -60.0% -158,597.0 104,037.0 262,634.0 LNG 7.0% 7.0 104.0 97.0 Panama HSFO 22.0% 65,266.0 362,388.0 297,122.0 VLSFO/ULSFO 25.0% 177,296.0 878,776.0 701,480.0 MGO/MDO 22.0% 27,097.0 150,980.0 123,883.0 — Maritime and Port Authority of Singapore, Rotterdam Port Authority and Panama Canal Authority Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Trump to grant partial tariff relief to UK


25/05/08
25/05/08

Trump to grant partial tariff relief to UK

Washington, 8 May (Argus) — The US will carve out import quotas for UK-produced cars and, eventually, reduce tariffs on UK steel and aluminum, under a preliminary deal US president Donald Trump and UK prime minister Keir Starmer announced today. The Trump administration will allow UK car manufacturers to export 100,000 cars to the US at a 10pc tariff rate, instead of the 25pc tariff to which all foreign auto imports are subject. The US and the UK will negotiate a "trading union" on steel and aluminum that will harmonize supply chains, US commerce secretary Howard Lutnick said. The US commended the UK government on taking control of Chinese-owned steelmaker British Steel last month. As a result of that action, under yet to be negotiated arrangements, the US would reconsider the UK's inclusion in its 25pc tariffs on steel and aluminum, the White House said. Starmer, speaking after the ceremony, told reporters that US tariffs on the UK-sourced steel and aluminum would, in fact, fall to zero. Trump announced the deal during a ceremony at the White House, with Starmer phoning in. The two leaders suggested that their preliminary deal was as significant as the end of World War II in Europe, 80 years ago. But that deal, which Trump described as "full and comprehensive" hours before its announcement is anything but that. Under the "US-UK Agreement in Principle to negotiate an Economic Prosperity Deal", the US will maintain the 10pc baseline tariff on nearly all imports from the UK that went into effect on 5 April, Trump said. The UK, Trump said, would lower the effective rate on US imports to 1.8pc from 5.1pc. The actual details of the agreement are yet to be negotiated. "The final deal is being written up" in the coming weeks, Trump said, adding that it was "very conclusive". Boeing, beef and biofuel The UK would commit to buying $10bn worth of Boeing airplanes, Trump said. He described the UK market as "closed" to US beef, ethanol and many other products, and said that the UK agreed to open its agricultural markets as a result of his deal. US ethanol exports to the UK, in fact, rose by 23pc year-on-year in March. Under the deal, the UK would expand market access to US ethanol, creating $500mn more in US exports, the White House said. The UK will reduce to zero the tariff on US-sourced ethanol, the UK Department of Business said, adding that "it is used to produce beer". Trump previewed the preliminary deal with the UK as the first of the many trade agreements the US administration is negotiating with many other countries. Trump contended today that there are trade talks underway with the EU and expressed confidence that the US-China trade discussions expected over the weekend would produce results. But Trump added that he will not lower the high tariffs on imports from nearly every US trade partner he imposed last month and described the UK's 10pc tariff rate as a favor to that country. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Sonatrach Augusta refinery restart extends into May


25/05/08
25/05/08

Sonatrach Augusta refinery restart extends into May

Barcelona, 8 May (Argus) — Crude deliveries to Algerian state-owned Sonatrach's 198,000 b/d Augusta refinery in Italy were higher in April, but it appears a full restart from planned works will take longer than initially expected. Crude deliveries last month were around 70,000 b/d, up from 20,000 b/d in March. Receipts averaged 95,000 b/d in January-April, down from 160,000 b/d overall in 2024. The refinery has been under a planned five-year maintenance shutdown since the end of January, the first turnaround since shortly after Sonatrach bought the plant from ExxonMobil in 2019. Sonatrach initially said the facility would be back online by 30 April, with units restarting in two phases. But the company in an updated note to local authorities said an atmospheric distillation unit, propane deasphalter, hydro-desulphuriser, propane splitter and other secondary units would potentially flare on restart up to 31 May. One of these segments is the butamer unit, which caught fire in April . It is unclear if the fire added to the length of the overall stoppage. Sonatrach has not replied to queries on the matter. It was anticipated the turnaround would be a little quicker than in 2019 (see chart), but the two periods of maintenance now appear to be roughly similar. Crude delivery last month included over 45,000 b/d of Saudi Arab Light, 15,000 b/d of Kazakh Kebco and over 5,000 b/d of Algerian Saharan Blend. Argus assessed these at a weighted average gravity of 33.7°API and 1.5pc sulphur content, compared with 36.5°API and 0.9pc sulphur in February, before receipts all but stopped for the works. Receipts averaged 34.7°API and 1.2pc sulphur in January-April, compared with 35.2°API and 0.9pc sulphur overall in 2024. The pace of delivery in May is slow. Around 750,000 bl of Arab Light has discharged but no tankers are signalling arrival. By Adam Porter Augusta crude receipts mn bl Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

IMO GHG pricing falls short on green methanol, ammonia


25/05/07
25/05/07

IMO GHG pricing falls short on green methanol, ammonia

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