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POLAND: Morawiecki takes over Orlen and Lotos
Since the beginning of June, PM Morawiecki has taken control of PKN Orlen and the Lotos Group, two largest state-owned oil companies. Previously the oil industry was controlled by the Minister of Energy, Krzysztof Tchórzewski. The reason for this change is twofold. First, there is disagreement over the merging strategy of PKN Orlen and Lotos Group (See the 28.02 CEC Daily for background information). Secondly, there are differences over development plans of Poland’s first nuclear energy plant. Tchórzewski wants PKN Orlen to be involved in the construction of a nuclear power plant, but Morawiecki and recently appointed PKN Orlen CEO Daniel Obajtek, are against the move.
Energy experts argue the government hasn’t worked out a plan to coherently form a financing model for a nuclear power plant and it wants to avoid the topic before the election season. Others argue that Poland cannot afford nuclear energy, hence Morawiecki had to intervene to rescue the oil sector and take over the state-owned companies before Tchórzewski put them in severe debt. The decision to transfer control of fuel companies was well received by investors on the Warsaw Stock Exchange. On Tuesday, PKN Orlen’s value rose by 4.2 percent, while the Lotos Group noted a 3 percent increase.
Morawiecki’s decision has weakened Tchórzewski considerably and it is a major manifestation of what the media has been arguing for some time – the PM is conflicted with the Energy Minister. Rumours about Tchórzewski’s potential dismissal have been appearing for months now, but they are recently gaining more prominence. This time around, these speculations have prompted a reply from the Prime Minister’s office, with officials dismissing them as unfounded rumours. Some signals within the ruling party, however, suggest that Morawiecki is displeased with Tchorzewski’s handling of energy companies, deterring investors from the energy sector, and tardiness in implementation of regulations concerning renewable energy sources.
Although Tchórzewski has supported insolvent mining companies and sustained social stability in the Silesia region, he failed to make economically justified decisions, which resulted in the decrease of capitalization of energy and imbalance in the energy mix. The opposition has frequently accused him of using state owned companies’ financial resources for own political gains, like in the case of constructing the coal-fired power plant in Ostoleka C, which is in his, de facto, own constituency. Energy experts also argue that aside from a lack of a long-term energy strategy, there is no diversification of energy and fuel supplies, which led to monopolization of PGiNG and few other energy giants, which then caused an increase of energy prices.
The final decision on any potential change regarding the Minister of Energy will be made by PiS leader Jarosław Kaczyński. Tchórzewski enjoys a strong position within PiS. He is Kaczyński’s close ally since the days of his first political party, the Centre Agreement. In recent days, commentators and journalists have argued that Kaczyński will wait with any potential reshuffle in the Council of Ministers until the November local elections. Additionally, internal discussions on lists to the European Parliament are starting within the party. As previous EU elections have shown, some high-level decisionmakers may seek to change their current posts to an MEP seat. While this may not be in Tchórzewski’s mind, an occasion is coming up for a potential review of all Ministers.