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President of Orlen Ireneusz Fąfara with political influence

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By selling the Polska Press media company, Orlen wants to show that it will be independent of political influence – emphasized Ireneusz Fąfara, the company's new president, in an interview for the British daily “Financial Times”.

– I must emphasize that we absolutely do not need the Polska Press media company. We will be looking for an investor who will be able to buy it from us at a fair price – said Fąfara.

President of Orlen with political influence

As “FT” reminds, in 2020 Orlen agreed to buy Polska Press, the largest owner of regional newspapers in Poland, from the German company Verlagsgruppe Passau. The takeover took place after the announcement of the then Law and Justice government regarding the “re-Polonization” of the media and cutting off foreign influence on this sector.

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The takeover sparked criticism from other domestic media, as well as outside Poland. Last year, the ethics board of the Norwegian state oil fund, which has 0.4 percent. shares in Orlen, put the company on a watch list because of the implications of the acquisition of Polska Press for press freedom and freedom of speech in Poland.

Fąfara stated that he wants to remove Orlen from the Norwegian watch list and dispel shareholders' concerns about the influence of politicians on Orlen's strategy. “Investors tend to avoid politically engaged companies because they are perceived as unpredictable and risky,” he explained.

“Political decisions will not affect our business”

Asked why investors should believe that Prime Minister Donald Tusk would allow Orlen to be independent, Fąfara said that he had not met Tusk or talked to his closest partners since he took over as president in April.

– For now, I am sure that with the current government, political decisions will not affect our activities. I would resign if I was told what to do – absolutely. This is my responsibility towards investors, this is my ethics, assured Fąfara, who managed the Lithuanian subsidiary of Orlen until 2017.

Fąfara said that from his predecessor, Daniel Obajtek, appointed by PiS, he inherited “something of a chaebol” – a model of multi-industry conglomerates that for a long time dominated the South Korean economy – including some subsidiaries that “do not directly support the activities” of Orlen.

– I did not expect the company to be so complicated, I was surprised by the poor state of internal regulations and management, I did not expect that so many people related to politics would work at Orlen – he added.

Ireneusz FąfaraLeszek Szymański/PAP

President of Orlen: the market is still waiting for our decisions

“FT” writes that last year Orlen's net profit increased to PLN 27.6 billion from PLN 21.5 billion in 2022, but concerns about the group's strategy harmed its share price, which dropped by 40%. under Obajtek's government and by another 6 percent. since the establishment of Fąfara. – The market is still waiting for our decisions – said Fąfara, in particular whether Orlen will maintain the capital expenditure plan promised by his predecessor. Fąfara promised to reveal “our approach to investment expenditure” in August.

The newspaper notes that Fąfara also has other issues to solve. In April, Polish prosecutors opened an investigation into whether Orlen's Swiss trading unit had “connections with terrorist organizations” – the Lebanese group Hezbollah – after Orlen revealed it was auditing the unit after losing $400 million on trading activities.

Orlen Trading Switzerland made prepayments for the purchase of crude oil from Venezuela and Sudan through “intermediaries that Orlen has never used before,” but the oil was never delivered, Fąfara said. He added that these small intermediaries were based in Dubai and other parts of the Middle East, but no document confirming their connection with Hezbollah was found in Orlen. – We are trying to recover this money, but it is very complicated – said Fąfara.

Merger of Orlen with Lotos

“FT” reminds that in 2022 Orlen finalized its most important transaction, taking over its domestic rival – Lotos. To overcome EU antitrust concerns, Orlen sold shares in the Lotos refinery in Gdańsk to Saudi Aramco and 417 gas stations to the Hungarian company MOL.

But in February, the Supreme Audit Office issued a report in which it stated that Saudi Aramco paid PLN 3.5 billion less for its shares in the Gdańsk refinery than their value, and that the transaction created a threat to Poland's security because it gave Saudi Aramco the opportunity to cut off supplies. fuel.

Asked whether Saudi Aramco could be forced to divest, Fąfara said “the process is irreversible because it was a key countermeasure imposed by the EU.” Instead, he plans to visit Riyadh soon to discuss “potential joint investments and our future cooperation with Aramco.”

He also described the merger of Orlen with Lotos as “irreversible”, but admitted that he was not convinced whether it brought benefits to the Polish energy market. – From the customers' point of view, the situation is always more comfortable when there is greater competition on the market – said Fąfara.

Main photo source: Leszek Szymański/PAP

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