Poland’s largest refiner shows interest in Nigerian crude

Poland’s largest oil refiner, PKN Orlen, is exploring Nigerian crude oil as its new source of supply following the country’s ongoing efforts to cut its reliance on Russian oil. PKN Orlen bought its first ever Nigerian crude oil cargo which is expected to arrive in mid-October, Daniel Obajtek, the company’s chief executive said in a monitored report.

A 130,000-tonne cargo of Nigerian oil is currently traveling to Poland and is expected to arrive in the middle of this month.

“If tests confirm the assumed yields structure and margins, further oil supplies from Nigeria will be a viable option,” Obajtek said.

Nigerian crude has struggled to find buyers over the past few months due to an overhang of unsold cargoes. Crude traders have said that offers have really reduced, given the size of the overhang from both the October and November programmes.

Also, Poland has been trying to diversify its oil supplies to reduce its reliance on Russian oil imports. Last year, Poland reduced the share of its imports of Russian oil to the lowest level since 2005, but the diversification of oil supplies came at a higher cost for imports from other countries, according to a report by Poland’s central bank from May 2018.

Another Polish refiner, Lotos, which PKN Orlen plans to take over signed in December 2017 a forward contract for the supply of U.S. oil to its refinery in Gdansk. Under the contract, at least five U.S. oil cargoes will be delivered by sea this year.