Risks related to diversification of supply sources


{GRI 4.11.}

Risks related to diversification of supply sources

− at Grupa LOTOS, feedstock is supplied mainly via a system of pipelines and by sea, which means that the key risks in this area lie in the political situation of the countries exporting crude oil and the condition of the infrastructure. We are consistently pursuing our policy to diversify the directions and sources of our crude oil supplies by focusing on the following aspects:

  • supply security − through progressive expansion of our presence on the international oil markets, regular contracting of various crudes transported by sea, creating conditions to radically increase the share of such crudes in total supplies to the refinery in case of any disruption of supplies from the main import market, and expanding the share of our own production in total feedstock volumes.
  • improvement of competitive position − by fully capitalising on the coastal location of the refinery in Gdańsk and the possibility of sourcing crude supplies through two independent channels: Russian oil through the Druzhba Pipeline and various types of oil through Naftoport (an offshore oil terminal).

The appropriate selection of crude types and supply directions is a result of continuous efforts to maximise the integrated margin.