Polish Government Considers Consolidation of State Oil and Gas Players, Shale Deals

Poland's controlled gas monopoly PGNiG, may be making a play for the country's second largest oil company.

According to the Polish newspaper Gazeta Prawna, the government is considering an acquisition of Grupa Lotos by PGNiG.

Both companies are listed on the Warsaw Stock Exchange, and controlled by the state. The treasury has the 53% stake in Grupa Lotos and a 70% holding in PGNiG.

The press office of the Treasury Ministry neither confirmed nor denied the information on a possible merger.

Grupa Lotos owns three refineries in Poland. Its main asset is Rafineria Gdanska, the second largest refinery in the country, linked to the import terminal in Port Polnocny (Northern Port) in Gdansk.

The group consists also of a number of subsidiaries, including LOTOS Petrobaltic, producing oil and gas from the Baltic Sea and companies exploring for oil and gas in Norwegian continental shelf and Lithuanian Baltic sea floor.

This week, Lotos announced it was preparing to start prospecting for shale gas in Lithuania, The company is also trying to obtain new licenses from the government in Vilnius.

PGNIG Enters into Shale Deals

For the past several weeks, Poland's Minister of Treasury Mikolaj Budzanowski has been pressing domestic energy and utilities sector to join forces to work together in shale gas exploration.

Minister Budzanowski urged PGNiG, Lotos as well as PKN Orlen to cooperate in exploration efforts and appealed to other state controlled entities to prepare plans for accessing new sources of gas to produce energy.  

Folowing the Minister's direction, PGNiG today announced that is had signed letters of intent with fellow state power firms PGE Polska Grupa Energetyczna SA and Tauron Polska Energia SA. and copper miner KGHM Polska Miedz SA for co-operation in shale gas exploration.