Poland's Grupa Lotos company

Polish refiner Lotos aims for long-term oil supply deal with Iran

Reuters– Poland’s second-biggest oil refiner Lotos is interested in securing a long-term supply deal with Iran once it completes a new coking unit at its Gdansk refinery next year, its chief executive said.

State-run Lotos wants to diversify its imports of oil and gas away from Russia, its largest supplier. It signed an agreement last year with National Iranian Oil Company and the first tankers carrying 2 million barrels of Iranian oil arrived in Poland in mid-August.

It is now in talks to receive another 2 million barrels.

“We are negotiating a supply of heavy oil from Iran,” CEO Marcin Jastrzebski told Reuters in an interview authorized for publication on Sunday. “We assume that shipment of two million barrels will reach the (Polish) port of Gdansk at the beginning of May.”

Lotos could potentially agree a long-term contract with Iran after it finishes construction of the 2.3-billion zloty ($570 million) coking unit at its Gdansk refinery in 2018, he said.

“The primary goal of the diversification is to improve(financial) results not just to change suppliers,” Jastrzebski said.

In 2016, 75 percent of oil processed at Lotos’s refinery came from Russia.


Jastrzebski said that he would like the company to start paying dividends again this year – after a 10-year break.

“We are still calculating the results,” he said. “My ambition is for Lotos to become a dividend-paying company already in 2017.”

Lotos announced a five-year strategy at the end of last year, part of a broader overhaul of the firm that also envisages investment of 9.4 billion zlotys in 2017-2022, among other steps.

“We want to gradually increase the level of dividends and reach the level of other companies in the sector,” Jastrzebski said. “We will be striving towards that, although the pace of growth remains uncertain.”

($1 = 4.0370 zlotys)

(Reporting by Anna Koper; Writing by Lidia Kelly; Editing by Susan Fenton)