Hungarian and Austrian oil groups MOL and OMV may have to wait until next year to know whether either will obtain a stake in Poland's top refinery PKN Orlen, Poland's energy privatisation chief said yesterday.
The outcome and the timing of the sale of 17.6 per cent in PKN, which is central Europe's largest refining group, is seen as key for the three companies as they vie for primacy in the regional market.
"The chance that we will return to talks over PKN Orlen with the two investors this year are very small," said Maciej Gierej, head of energy industry privatisation agency Nafta Polska.
"Also it is no secret that the new government has a very different approach to privatisation as such, and certainly does not take this deal for granted," he added.
The sale, initiated by the former government, was to forge a central European player capable of competing with global majors as regional markets open up ahead of the European Union's eastward enlargement set for 2004.
But Poland's seven month old leftist government has put the tender on ice, saying the merits of the deal had to be carefully reviewed, especially in view of the ongoing sale of PKN's smaller domestic peer, Rafineria Gdanska.
The decision to put the sale on hold has left OMV and MOL second-guessing over the fate of their bids and made it more difficult for the three companies involved to plan new acquisitions, such as that of Croatia's Ina refinery.
The three are among 10 bidders for the 25 per cent plus one share in Ina, with the Croatian government expected to shortlist preferred partners for the refinery next month.
Meanwhile, PKN is lobbying in favour of a merger with Rafineria Gdanska - plans so far opposed both by the smaller refinery's management and the state treasury.
Nafta Polska, which wants to sell 75 per cent of Gdanska to an Anglo-Russian consortium, said that it would not make any decisions on the PKN stake before knowing the result of the ongoing negotiations.
A group of UK-based Rotch Energy and Russia's largest oil group Lukoil has until Tuesday to finish due diligence at the Baltic-coast refinery and a binding offer for the stake is expected later this month.
"If we get the offer, we could close Gdanska deal before the end of the year," Gierej said.
Gdanska's potential partnership with cash- and oil-rich Lukoil is likely to boost the competitiveness of the 85,000 barrels per day refinery, whose operations are now squeezed by a much larger PKN Orlen.
Meanwhile, PKN Orlen said yesterday it had made a bid for 25 per cent plus one share in Croatia's largest firm, oil and gas group Ina, joining other leading east European refiners.
"I can confirm that we placed a bid for a stake in the INA refiner," PKN spokesman Ireneusz Wybych told Reuters.
INA, whose value is estimated at up to 1.8 billion euros ($1.7 billion), has also drawn bids from PKN's rivals such as Hungary's MOL and Austrian OMV .
The Croatian government said it would in early July choose a shortlist from the 10 Ina bidders, which also include Italy's Edison, Russia's Lukoil, Rosneft and Sibneft.
The bid is PKN's first stab at a foreign acquisition since it tried to purchase east German refiner Leuna last year. The move, backed by the former right-wing cabinet, was harshly criticised by the left-wingers who won last September's general elections.
"PKN's potential expansion into Croatia would give it a good foothold in the Hungarian or Austrian markets," said Michal Mierzwa, analyst at Erste Securities in Warsaw.
"This is a positive, but only a minority stake is on offer which is likely to keep Orlen shares from suddenly rising."
The new government, which has in recent months grabbed management control over the refiner, has not yet detailed its expansion strategy for PKN, whose share price rose 0.3 per cent to 19.65 zlotys early on Monday.
But the treasury, which owns 28 per cent in the refiner, has frozen talks to sell a 17.6 per cent stake in Orlen to either MOL or OMV pending the outcome of the sale of Poland's second largest refiner Gdanska.
The choice of the city of Helsinki is not incidental as the capital of Finland had hosted US-Soviet negotiations on the limitation of nuclear stockpiles in 1969