You became the Man of the Year of the Economic Forum. Will you bear this responsibility?
I appreciate this important recognition, but I'd like focus on business more. I have a plan that I am currently implementing.
The title is also a commitment.
Yes, it is one of the most important awards that I have received. It is a commitment which confirms me even more that the direction I have chosen, i.e. building a multi-energy concern, is right. This award proves that my actions are assessed positively.
In your times, Orlen is increasing its assets. The first company that became part of the concern is Energa.
I was also completing the full acquisition of the Unipetrol group in the Czech Republic. At Orlen, we strive to own 100% of companies. We invest in them, we put our know-how into their daily work. One of the processes was to complete the restructuring of the Unipetrol group.
Has there been an effective restructuring in the case of Energa?
The takeover stage is behind us, the merger took only four months. It was one of the fastest mergers in Poland. The group is being restructured all the time, as well as the process of optimization and complementary merger with Orlen. There will be savings on this account this year.
Will there be layoffs in Energa?
No. There are many other areas where we want to release synergies. They include, among others, subsidiaries that may act for the benefit of the entire Orlen Group. It is also an investment in Ostrołęka. We changed the approach to the construction of power plants by focusing on gas technology instead of coal. We started to act immediately. The entire optimization is planned for at least four years, but I want the results to be noticeable to shareholders as soon as possible.
What is the work schedule for the merger with Lotos and PGNiG?
We are following the plan. We have obtained the approval of the European Commission on the lotus. It was a very difficult process. We negotiated hard, and given the original conditions proposed by the European Commission, we could not accept some of them, the result is optimal. This process has to be closely related to business.
We now have 12 months to find a partner to fulfil the remedial conditions. We conduct talks with companies from Europe and beyond. Our main goal is the profitable exchange of certain assets. It does not have to be a one-to-one Exchange, e.g. station for station. Perhaps we will go to a more modern petrochemical or energy industry. The most important thing is that we get a chance for further development. The acquisition of PGNiG will also serve this purpose. The process is already underway and we want to complete it at the same time as the merger with Lotos.
Aren't you afraid to let the wolf into the sheepfold? A strong competitor that will threaten Orlen.
Did I say that we should let a competitor in the refining area? No. Like I said, it doesn't necessarily have to be a 1 to 1 exchange. Synergies that are dimensioned allow the process to be carried out. Lotos, as an independent refinery, has no chance for further development. All such refineries in Europe are in some groups. That is why Lotos is more sensitive to unfavourable changes in the global economy. Lotos needs a strong partner like Orlen. We also need Lotos for further development, for example in the petrochemical area. We also need it to balance research and innovation and joint purchasing. These synergies will happen immediately.
Who would be the ideal partner for this project? The one that would not be risky for the stability of the Polish energy system, but conducive to your vision of development?
We would like to find such a partner. I cannot reveal who we are talking to, but these are not just European companies.
What assets are you counting on?
It all depends on the negotiations. We are a concern that operates in the energy, refining and petrochemical sectors. We are looking for a partner in these areas to develop faster.
Are you looking for capital or technology more?
Technology. For 30 years, we have not invested enough in research and development. We do not have the appropriate concessions, licenses or base projects. Now we need to catch up quickly.
Perhaps it will be a partner that has a strong upstream, or a partner in the field of low- or zero-emission energy. Everything is on the table. We will choose a variant that will allow us to carry out this process effectively, and its final was business-effective for all parties.
You have to look at it holistically, evaluate the whole. This is only the first element, i.e. the EC and remedial conditions. The second will be to negotiate terms with your partner. We want it to be a springboard for development.
Strategic thinking about the future of the energy industry is not only about refining crude oil. What else are you planning?
These are other technologies, such as hydrogen. Modern petrochemicals and bio-additives are important to us. The same goes for zero-emission energy. We can take offence at the whole world, but the regulations are inexorable. We have to produce on optimal assets, and not be overburdened with CO2 charges, because that does not allow us to be competitive.
We are doing these mergers because we think ahead, several years ahead. If we do not optimize the processes and implement new solutions, we will not be here in 20-30 years. It is not only a matter of the slogan of energy transformation in Europe. We also want to do business during the transformation.
Are you upset about the Green Deal or is it motivating you?
I look at Poland's business and security. If Europe follows the Green Deal and adjusts regulations accordingly, it is difficult to go in the opposite direction. We must invest in electricity production that will not be burdened with large fees.
In 2024, we plan to start construction of a wind farm in the Baltic Sea. We are aiming at low and zero-emission energy. We also invest through acquisitions. If, as Orlen, we bought the Energa Group, it has the right proportion of RES in its portfolio. As a result, we can develop faster. But this group did not have the capital and reliable partner to develop. Unfortunately, zero-emission technologies are costly.
Why did Orlen buy RUCH?
Orlen has strong retail sales. In two years we will exceed 2,000 stations in Poland. We are also developing strongly abroad. We have a large income from non-fuel sales. RUCH is not only about press distribution. There is logistics and kiosks with which we can promote our brand. These synergies are priced. We are going into a business that promises. Retail is our very developing area.
Critics say you have a great appetite. Are you not afraid that you will build an organization so large that it will be unmanageable?
This is not a question of my ambitions, but the necessity to compete. BP and other concerns have integrated gas, refining, good mining, processing and energy assets. They will actually implement the Green Deal with money from the "dirty order". We also need to balance that. We must create a strong concern to carry out the energy transformation so that it is beneficial for us and the Polish economy. And, of course, earn money in the process.
It will be controllable, I assure you. It is one matter to buy something, and another to carry out the entire process of restructuring optimization effectively and combine subsidiaries. For this, there are suitable advisors so that management is quick and precise.
Will the new Orlen be Cheebol?
No. We are building a multi-energy concern, and this is a significant difference. This is how the largest global concerns from the fuel and energy industry built their position. And no one was talking about cheebols in this case.
Daniel Obajtek, CEO of PKN Orlen:
Creation of a multi-energy company requires determination
Daniel Obajtek has been the CEO of the largest concern in Poland and in the region for over two and a half years. During this time, he outlined a very ambitious vision of further development of PKN Orlen Group and, more importantly, he has been consistently and determinedly implementing it. It primarily involves creation of a multi-energy concern, whose scale and scope of operations would allow it to compete with the leading European players.
Obajtek had started implementation of this objective three weeks after becoming the CEO of Orlen. At the end of February 2018, he signed a letter of intent with the State Treasury concerning the purchase of the majority stake in the fuel giant Lotos. Although the transaction has not been finalised to date, and most probably it will not take place earlier than in a year and a half, in just a few months he managed to take over the fourth largest energy group in Poland, i.e. Energa.
In mid-July, Obajtek signed another letter of intent with the State Treasury, this time concerning the acquisition of PGNiG. The transaction is to be finalised together with the acquisition of Lotos. Once the combination occurs, the new Orlen will be able to generate approximately PLN 200 billion in revenue and an EBITDA of PLN 20 billion per year. Such a result would be generated as a result of refining and petrochemical operations (40%), extraction (20%), retail sales of fuels, gas and energy, and regulated distribution (15%), and power generation (10%). The combined entity would also have significant capital and much better investment opportunities.
Already in June 2018, Obajtek announced the launch of Orlen Group's largest petrochemical project in its history. At the time, he presented it to be a strategic decision for both the company and the Polish economy. As a result of it, Poland, from an importer, would become an exporter of petrochemicals. Completion of the project worth approximately PLN 8.3 billion is planned for 2023. It is expected to pay for itself in five or six years. The CEO of Orlen is also strongly committed to projects related to so-called new mobility, hydrogen technologies, recycling, as well as research, development and digitisation.
The actions taken by Obajtek have the solid political support of the current government. They are expressed not only by Prime Minister Mateusz Morawiecki or Deputy Prime Minister and Minister of State Assets Jacek Sasin, but also by the President of the Law and Justice (PiS) party, Jarosław Kaczyński. Obajtek is his favourite CEO. They often meet and talk about Poland and the economy. Consequently, when Obajtek mentioned that Orlen would not invest in a nuclear power plant, the ministerial plans in this respect had to change accordingly.
On the market, opinions on the CEO of Orlen vary. Apart from praise, or even admiration, there is also criticism. Members of the opposition and Pomeranian local government officials disapprove of his activity the most. The latter are not reassured by Obajtek's declarations that after the acquisition of Energa and Lotos, taxes from their operations will continue to flow into the local government and employment will remain unchanged. Stock market analysts and investors fear that the acquisitions will not bring the planned effects, which will lead to a decrease in the value of shares.
Before taking up the post of the CEO of Orlen on 6 February 2018, Obajtek managed Energa Group for a year. During this time, the company's market value grew by 38%, which was the best performance among Polish energy companies and which he considers one of his most important successes. Obajtek was also president of the Agency for Restructuring and Modernisation of Agriculture, where he managed 11,000 employees and a budget of PLN 27 billion. Among other things, he streamlined the Agency’s processes related to the disbursement of billions from the EU and national funds. Finally, from 2006 to 2015, he was the head of Pcim gmina in Lesser Poland, implementing many development and infrastructure initiatives.