Letter from the Chairman of the Supervisory Board
Ladies and Gentlemen,
initiatives implemented by the ORLEN Group throughout 2021 demonstrate that when setting the growth path for the Group we correctly interpreted the trends prevailing in the global economy. As a result, we are positioned as a leader of the energy transition in Central and Eastern Europe. We have unveiled and are implementing further plans. In line with the stated strategy, we have embarked on projects that will support the energy transition and, consequently, help the Group achieve carbon neutrality by 2050. We have delivered on our pre-set goals despite the recent headwinds. Poland and the rest of the world economy are still feeling the pinch of the pandemic, with its successive waves compounded by the energy crisis and rising tensions across our eastern border.
One of the biggest challenges we are effectively responding to with our pro-active measures is for the ORLEN Group to ensure energy security for Poland and our entire region spanning Lithuania, Latvia, Estonia, the Czech Republic, and Slovakia. Our capabilities in this domain will grow even stronger after the mission to build a multi-utility group has been accomplished. To this end, this past year we ramped up strategic merger processes, mainly the mergers with the LOTOS Group and PGNiG, and we consolidated our leadership in the region. Through concrete actions and investments that support growth, we are leading the ORLEN Group to further solidify its strong position in the global market. Last year alone, capital expenditure totalled a record PLN 9.9bn. This year CAPEX will be PLN 15.2bn, a figure unprecedented in the Group’s history. Through our investments we make a real contribution to strengthening the Polish economy.
We continued to develop the existing and forged new stable, long-term relationships with the world’s largest oil producers. As part of the remedies implemented under the merger of PKN ORLEN and Grupa LOTOS, we will reinforce the alliance with the world’s largest fuel and chemical company, Saudi Aramco. We have signed an agreement securing crude supplies of up to 20 million tonnes a year, which will cover 45% of total demand of the ORLEN Group post-merger.
The future of the ORLEN Group, and of the entire energy industry, will be determined by the development of zero- and low-carbon energy sources. As the ORLEN Group, we will be the first to build an offshore project in the Polish section of the Baltic Sea, which will be implemented together with Northland Power, our Canadian partner with whom we signed a cooperation agreement in 2021. Making sure that Poland’s first offshore wind farm starts commercial operation in 2026 is our top priority. Last year, we partnered with GE Renewable Energy to strengthen our competitive position in securing new licences for offshore wind farms. We are also consistently investing in onshore wind and solar PV farms. We are at an advanced stage of preparations for the deployment of the small modular reactor (SMR) technology. We have exclusive rights in Poland to use the BWRX-300 technology of US GE Hitachi Nuclear Energy, which is currently the world’s most advanced technology on its way to commercialisation. In 2021, we launched Hydrogen Eagle, a scheme to develop an international chain of hydrogen hubs powered by renewable energy sources and to build more than 100 hydrogen refuelling stations.
Accurate forecasting and planning, innovating and staying up to date on emerging technologies is a skill and quality we are valued for in the current business and social realities. We are a strong and reliable partner in Poland and abroad. The strategic decisions implemented by the Group bring tangible benefits to the entire ORLEN Group, its Employees, Shareholders, Partners and Customers.
Wojciech Jasiński
Chairman of the Supervisory Board
PKN ORLEN S.A.
