PKN ORLEN claims compensation for contaminated oil

  • Dec 11, 2019
  • PKN ORLEN

​PKN ORLEN demands that Russian suppliers pay compensation for delivering contaminated oil. The compensation is to cover, among others, additional costs of processing such oil.

“In line with our previous declarations, we have made a claim for compensation from the suppliers of oil with excessive levels of organic chlorides. Our aim was to precisely calculate all the costs we had incurred to protect our production units and to ensure the supply of clean, uncontaminated oil and maintain the continuity of processing. This is why the process took so long. It was additionally extended due to the fact that we had to adapt our analysis to the scheduled maintenance shut-downs at our refinery. We are determined to recover all the costs we had to pay,” said Daniel Obajtek, CEO and President of the PKN ORLEN Management Board.

The compensation is sought in connection with the shutdown of the Druzhba pipeline by PERN on April 24th 2019. The supply of Russian oil was interrupted for 46 days. The measures taken by PKN ORLEN, including the supply diversification strategy, the use of operational stocks, and the infrastructure, such as the IKS Solino storage caverns, gave it access to resources sufficient to maintain production at planned levels and make the transmission system operational again. The support from the Polish government was also critical in this respect.

PKN ORLEN takes every opportunity to forge new relationships with suppliers as it helps improve Poland’s energy security. Diversification of crude oil supplies to the Płock refinery is an effect of business relationships established with companies outside Europe, including in Africa and the Persian Gulf. The efforts undertaken by PKN ORLEN have made it possible to achieve an optimum crude slate that optimises refinery production, and have helped to improve the quality and price of finished products and market stability. The refinery in Płock receives approximately 1.4 million tonnes of crude oil every month, of which an average of ca. 700,000 tonnes is from sources outside Russia. Spot purchases of crude oil from Angola, Nigeria, the United States and the United Arab Emirates have been contracted since the beginning of 2018.