PKN Orlen Said in Talks with Eni on Czech Refinery Stake
Polish oil firm PKN Orlen is in talks to buy Italian oil and petrochemical producer Eni's 32.4% stake in the Czech Republic's sole refinery, the Czech industry minister said, a step that could lead to more investment and help secure its future.
The sale would give local PKN unit Unipetrol full ownership of Ceska Rafinerska after it also bought a 16% stake from Shell earlier this year for $27 million.
Eni is negotiating with Orlen on the conditions for it to exit Ceska Rafinerska, Czech industry minister Jan Mladek told the news agency. "We expect that PKN Orlen will negotiate this," he added.
Unipetrol has reported net losses for the past three years including impairments on its refining assets, hurt by the overcapacity in Europe's refining sector.
It plans to become profitable by investing $1 billion in the coming years in plant upgrades and new projects that would more closely integrate its refining and petrochemical businesses.
The state wants the investment in modernisation to help keep Ceska Rafinerska's two plants open and the Czech Republic's energy needs secure. A plan under the previous centre-right government last year had considered that the state could buy into the refinery.
Czech newspapers said Orlen executives had met with Mladek to propose merging two state-owned companies, crude pipeline firm Mero and oil products pipeline operator Cepro, with Ceska Rafinerska to create one company in which the Polish group would have a controlling stake.
