CEO of Polish state energy giant Orlen dismissed

Daniel Obajtek, the CEO of state energy giant Orlen – the largest firm in Poland and the entire Central and Eastern Europe region – has been dismissed from his position.

He was a close ally of the former ruling Law and Justice (PiS) party and the decision to remove him comes amid a wider overhaul of management at state-owned companies under Donald Tusk’s new government, which took office last month.

Obajtek oversaw an ambitious expansion of Orlen, resulting in it last year ranking among Europe’s 50 largest firms. But he also faced accusations that he used the firm’s resources to support PiS, including during its election campaign last year.

Orlen: rada nadzorcza spółki postanowiła odwołać Daniela Obajtka z zarządu Orlenu z upływem dnia 5 lutego 2024 roku. (PAP) pic.twitter.com/75MyVHf9Ph

— PAP (@PAPinformacje) February 1, 2024

“The supervisory board of the company, after reviewing the letter of the president of the management board, Mr Daniel Obajtek, in which he declared that he ‘puts himself at the disposal of the supervisory board’, decided to dismiss [him],” announced Orlen today. His last day in office will be 5 February.

That followed Obajtek this morning revealing, in an interview with broadcaster Radio Zet, that he had put himself at the board’s disposal as “a matter of honour”.

Obajtek, a former small-town mayor, was plucked from relative obscurity in 2018 to head Orlen. Since then, the company has experienced a period of rapid growth that included a number of mergers and acquisitions, mainly involving other Polish state energy firms, such as Lotos, PGNiG and Energa.

Polish state energy giant Orlen is set to continue its recent expansion in Norway after agreeing a $445m deal to purchase KUFPEC Norway from the Kuwait Petroleum Corporation.

The acquisition will boost Orlen’s gas output from Norway by a third https://t.co/vuxe8r349v

— Notes from Poland 🇵🇱 (@notesfrompoland) November 21, 2023

Those moves tied in with a plan by the PiS government to turn Orlen into a global energy player, both in its traditional area of fossil fuels but also increasingly with regard to renewable energy sources such as offshore wind. Orlen was also planning to invest in small nuclear reactors.

The company also expanded internationally, and now has seven refineries in Poland, the Czech Republic and Lithuania as well as has more than 3,000 petrol stations in seven countries, serving more than 15 million customers in the region.

Last year, Orlen was ranked as the 44th largest company in Europe by Fortune magazine. It was the only firm in the Central and Eastern Europe region between Germany and Russia to make it into the top 50.

Polish state energy giant Orlen has been ranked as 44th largest company in Europe by @FortuneMagazine.

It is the only firm in the region between Germany and Russia to reach the top 50, and also recorded the largest annual revenue growth among those firms https://t.co/GbeyGVFuP7

— Notes from Poland 🇵🇱 (@notesfrompoland) November 9, 2023

At a meeting with Orlen employees following the announcement of his dismissal, Obajtek emphasised the scale of development the company had undergone under his leadership.

“We went from a fourth-division club to the Champions League. The company is leading the investment processes and fuel transformation of our country,” he said, quoted by Onet news service.

“These were difficult times. A pandemic broke out, the whole world was wondering which direction to go. I guarantee that we will not turn back those times. We will not change the world with laws. We have to change the world with business,” he added.

Ostatnie lata to dla @GrupaORLEN czas najszybszego rozwoju w jej historii. Zbudowaliśmy nie tylko jedną z największych firm w Europie, ale przede wszystkim koncern, który w chwili próby zapewnił Polsce 🇵🇱 odporność na kryzys energetyczny, jakiego nie widziano na świecie od lat.… pic.twitter.com/7iWJO1Yi7F

— Daniel Obajtek (@DanielObajtek) February 1, 2024

Obajtek’s leadership, however, was also marked by many accusations that he used the company to politically support PiS, the party he belonged to when previously serving as a mayor.

Ahead of last year’s parliamentary elections, Orlen was accused of artificially keeping fuel prices low to help PiS’s campaign. The firm denied it, but prices began to rise again just days after the elections, in which PiS lost its majority.

According to the former Orlen CEO Jacek Krawiec, the price cuts before the election may have cost Orlen a total of 5.7 billion zloty (€1.31 billion).

Obajtek himself donated to PiS’s election campaign, saying that “of course I want PiS to win”. It has long been rumoured that, once he leaves Orlen, he will return to politics with his former party. His dismissal today was celebrated as “good” news by Prime Minister Donald Tusk.

State energy giant Orlen’s wholesale fuel prices have continued their post-election rise.

The firm was accused of artificially lowering prices before the elections to help the ruling party. It denied those claims.

For more, see our report from last week: https://t.co/GIKRT8gsW5 pic.twitter.com/2xYI7MUZjP

— Notes from Poland 🇵🇱 (@notesfrompoland) October 24, 2023

The market appeared to react positively to the decision to dismiss Obajtek. At noon, the firm’s shares were up almost 3.5% on the day, trading at 64.8 zloty a share.

Krzysztof Pado, deputy director of the analysis and information department at brokerage BDM, noted, however, that Orlen’s share price is still below the level at the beginning of the year.

“Today’s increase may be related to investors being relieved that the CEO change process took place in a calm manner,” Pado told Notes from Poland.

It is not yet known who will become Orlen’s new CEO. The new government has promised that the management of public companies will be selected in open competitions, rather than through political appointments.

Source: stooq.pl

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