April 25, 2012:

WARSAW –  Polish state-controlled oil firm PKN Orlen SA (PKN.WA) has abandoned a plan to sell Lithuanian unit Orlen Lietuva, Chief Executive Jacek Krawiec told reporters Wednesday. PKN Orlen bought Lithuanian refiner Mazeikiu Nafta, later renamed Orlen Lietuva, in 2006 for $2.8 billion and made an additional investment of $750 million in the business. Since being acquired by PKN Orlen, the refinery has underperformed because shipments of cheaper crude supplied from Russia through a branch of the Druzhba pipeline have stopped. PKN Orlen for a long time considered selling its underperforming operations in Lithuania. But last year it said it had reduced its debt pile and that the Lithuanian refinery's performance had improved, which changed the situation.

Krawiec said Wednesday conclusions based on analyses by Nomura, hired to evaluate the sale, led the company to decide to keep the business. PKN Orlen didn't receive satisfactory offers for the Lithuanian refinery, although it may revisit the sale if it gets an attractive offer, he added. PKN Orlen now plans to build value at the Lithuanian operations, he said.

By Dow Jones Newswires