“The present fuel market became not only global but also unpredictable,”  emphasised in his presentation Mr. Wiesław Prugar, President of Orlen Upstream. Among the factors making up such unpredictability, most of all he listed political tensions in the regions with huge oil production potential and the uncertainty accompanying economic situation in Europe and around the world. In his opinion, when entering into extraction projects one has to take all of the above under consideration. “That is what Orlen is doing,” he assured, adding that the results of such actions will be noticeable only in the long-term. 

 

In the opinion of Jakub Korczak, Vice President, Investor Relations at Kulczyk Oil Ventures, in such a difficult environment it is very important to keep the right proportions between the desire of profit and minimization of risk. “Usually, it is the case that the most prospective projects involve the biggest risk of failure. KOV attempts to bring together such issues having a portfolio of projects among which there are both the production assets as well as exploration projects,” he said.

 

The President of Orlen Upstream did not hide that the company sees the greatest hopes in the potential of the Polish deposits of the shale gas. In turn, Kulczyk Oil is not planning to get involved in the exploration of the shale deposits. “We are in fact not excluding the presence in Poland but only as part of the conventional projects,” said Jakub Korczak. 

 

The discussion around the retail area focused on the fuel prices and the structure of the Polish petrol station market. In the opinion of Leszek Wieciech, General Director of the Polish Organisation of Oil Industry and Trade, after the New Year we have to expect another round of price increases related with the increase of the excise tax on diesel. According to the forecasts made by the Polish Organisation of Oil Industry and Trade, we are facing the increases which may reach a dozen of groszy per litre in the case of petrol and over 20 groszy for diesel. 

 

Although the oil and its quotations, which determine the fuel prices remain beyond any influence, with respect to the share of taxes in the price of fuels we already have such an influence. “Our position is that it is necessary to reduce tax burdens imposed on fuels. It is possible through the reduction of VAT or by the reduction of the excise tax on petrol which currently is above the EU minimum”, said Halina Pupacz, President of the Polish Chamber of Liquid Fuels. In her opinion, each station in order to have the guarantee of survival needs a margin at the level of approx. 24 groszy per one litre of fuel. Meanwhile, this year it happened many times that the margins were close to zero. 

 

This creates a serious risk for many private operators conducting activities on the retail market. Large corporations have different problems. “The changing road network in our country poses certain challenges for us. There are more and more motorways at which we have to be present. Meanwhile, the expectations of the GDDKiA [General Directorate for National Roads and Motorways] with respect to the rent for lease of the sites for the Passenger Service Areas are very high. It is even more painful because now there is no problem with driving on the existing sections of the motorways without refuelling,” convinced Paweł Lisowski, President of Lotos Paliwa. Mr. Marek Podstawa, Executive Director for Retail Sales at PKN Orlen, was of the same opinion. The corporation based in Plock still faces the restructuring of its chain. “We still have many stations in Poland which fail to comply with technical regulations which will come into effect at the end of 2012. Many of them will not be modernised and in consequence they will have to disappear from the market. We are also considering the unification of our station brands on individual markets. The crisis may, however, cause us to postpone such plans until more peaceful times,” he said.

 

Notwithstanding the completion of the larger investment projects at the Polish refineries, both our corporations wonder how to further improve the profitability of such plants in a situation where the refinery margins are at very low levels. In the opinion of Grzegorz Czul, Vice President of Fluor SA, energy efficiency creates such an opportunity. “Our experience convinces us that when making minor and not very costly investments one may significantly improve energy efficiency at the level of single installations. These are realistic savings, even larger when we take into account the costs of the CO2 emissions which may be avoided in this manner,” he stated. 

 

Also, bio-fuels may be the opportunity for the refineries. “Both our refineries are now ready to launch the production of the hydrogenated vegetable oil based on the co-hydrogenation technology. This type of fuel has an advantage over the traditional bio-fuels as its properties are even better than those of the ordinary diesel. What is left, is only the issue of appropriate support for such production and we are waiting for it”, said Leszek Wieciech.