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Government approves new strategy for privatisation of energy market

A revision of its strategy for privatising the oil sector of the energy market, has the government confirming what has seemed obvious for some time; a single major production centre will be acceptable rather than the previous strategy of two.

"The new programme is so flexible that it will enable a merger between Rafineria Gdansk and PKN Orlen, on the condition that such a move is advantageous," said Treasury Minister Wieslaw Kaczmarek. However, this does not mean that there will be automatic talks with PKN Orlen on the sale of 75% of the stock of the privatised RG, said Kaczmarek.

Russia's Lukoil and UK-based Rotch Energy had tabled a joint bid for RG, but Rotch has now offered PKN Orlen a deal whereby the two would bid for the 75% stake in RG. What is complicating matters is that the original Lukoil-Rotch bid has exclusive rights to bid until October 17. According To Kaczmarek, nothing can be done before that date.

This may be intended to cool the enthusiasm of PKN Orlen's President Zbigniew Wrbel, who has described a tie-up with Rotch as highly favourable. The deal would see PKN Orlen acquire 25% of RG less one share with full management rights, while Rotch acquire 50% plus one share. Wrobel sees this as ideal as he would be acquiring the company for a third of the cost, allowing more funds for investment.

However, Lukoil vice president Sergei Popov claims that the Russian company is still a viable bidder and could extend the validity of their bid. The Hungarian oil corporation MOL is also still interested in the RG stake.

(NewsBase 07.x.02)

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