PKN says refineries' oil supply secure despite Saudi attacks

Despite attacks on Saudi Arabian oil facilities, Poland’s PKN Orlen says oil supplies to its refineries are secure due to its diversified sourcing and it does not expect near-term fuel prices in Poland will rise.

State-run PKN, whose Plock refinery crude used to be sourced almost exclusively from Russia, started to diversify its buying a few years ago aiming to reduce its reliance on Russian supply.

That approach helped PKN keep Plock running when deliveries of Russian oil via the Druzhba pipeline were suspended in April due to contamination.

PKN Orlen has a long-term deal with Saudi Aramco on deliveries of 300,000 tonnes of crude per month.

It was also supposed to receive up to 800,000 tonnes of crude oil from Saudi Aramco Products Trading company in six spot deliveries between May and October.

“We are in constant contact with Saudi Aramco. Supplies to the Orlen Group refineries are secured,” the PKN press office said in an-email sent to Reuters on Monday evening, noting it receives oil from various sources.

“The next oil transport will be delivered from Nigeria at the end of September. We will soon inform you about further deliveries from other directions,” PKN said.

The Plock refinery receives around 1.4 million tonnes of crude per month, 700,000 tonnes of which comes from non-Russian sources, including 300,000 tonnes from Saudi Arabia. In total, PKN’s refineries - in Poland, the Czech Republic and Lithuania - receive 30% of their crude oil from outside Russia.

“We are constantly monitoring the situation on the oil markets, also in the context of recent events in Saudi Arabia. However, it is too early to clearly state to what extent they will translate into the oil market in the coming months,” PKN said.

Saudi Arabia is the world’s biggest oil exporter and the attack on state-owned producer Saudi Aramco’s crude processing facilities at Abqaiq and Khurais has cut output by 5.7 million barrels per day. The company has not given a timeline for the resumption of full output. (Reporting by Agnieszka Barteczko; editing by Jason Neely)