Poland's Orlen agrees North Sea crude supply deal with BP

Polish refiner Orlen has contracted BP to supply 15% of its feedstock demand with North Sea crude over the next year, it said Aug. 19, as it has sought to shore up supply links for its European operations.

In a statement Aug. 19, Orlen said it had signed a contract with BP to supply it with 6 MMt (around 150,000 b/d) of crude oil from Norwegian fields in the North sea over the next year, helping it to diversify its feedstock.

Under the deal, crude oil cargoes will be delivered to either the Polish port of Gdansk or the Lithuanian port of Butinge, subject to demand. The first oil tanker is expected to arrive in Gdansk in September.

Orlen currently processes a variety of North Sea crude grades, including Forties and Brent from the UK and Oseberg, Johan Sverdrup, Troll, Grane, Brent and Ekofisk from Norway, it said in its statement. Increasingly, however, the refiner has also sought to supplement supplies with WTI Midland crude, Baaken and Mars from the US, alongside Persian Gulf crude oil and West African grades including Forcados and Bonny Light crude.

Ireneusz Fąfara, president of the ORLEN Management Board underscored the economic incentive to process North Sea crude. "The oil we will acquire through this contract is not only of consistent quality and sourced from geographically close North Sea fields but also has properties that ensure high yields and is well-suited to the processing technologies at our refineries. This, in turn, enhances the economic efficiency of our production facilities," he said in the Aug. 19 statement.

The group will continue to seek other areas of collaboration with BP, he said, while the international oil company's Poland boss also expressed optimism that the company might play an expanded role in sourcing other crude supplies for the refiner.

"Our agreement to supply ORLEN with Norwegian crude oil is an important step for our business in Poland," said Bogdan Kucharski, Head of Country, BP Poland. "It also helps enhance energy security for Poland and the wider Central and Eastern European region. Through our trading team we are able to supply not only North Sea crudes but also access many of the other types of oil Orlen uses."