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The Warsaw Voice » Business » August 1, 2013
Business & Economy
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Lotos, BP in Aviation Fuel Deal
August 1, 2013   
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Air BP, the aviation fuel services division of BP, the British multinational oil and gas company, signed an agreement at the end of June with Polish oil company Lotos to form a joint venture that will supply aviation fuel in Poland.

The joint venture, Lotos – Air BP Polska, will be formed by Air BP buying 50 percent of Lotos Tank, the wholly owned aviation subsidiary of the Lotos group. Air BP and Lotos will be equal shareholders in the company. The deal is expected to be completed in the next six to eight weeks subject to competition authority approval. Initially Lotos – Air BP Polska will operate at the airports in Gdańsk, Warsaw and Cracow.

Through the joint venture, the two companies plan to carve out a bigger slice of the aviation fuel market in Poland.

Executives say Lotos – Air BP Polska will benefit from Air BP’s global customer relationships and technical operations experience, as well as the Lotos group’s local expertise and supply capability.

David Gilmour, Air BP Chief Executive, said, “We are always looking for new opportunities to grow the Air BP business. Poland is the country with the fastest growing aviation fuel sales in Europe and we have found a strong, local partner in Lotos.”

Air BP is the aviation services division of BP and markets aviation fuels and specialist products around the world. Air BP has a network of operations at around 600 locations in over 45 countries and sells over 7 billion gallons of fuel a year. Air BP’s many customers include domestic and international airlines, the military, business and private aircraft owners, as well as international airports and airfield operators.

Paweł Olechnowicz, CEO of the Lotos group, said the joint venture between the two companies puts an end to the domination of Petrolot, a company owned by Polish oil giant PKN Orlen, on the domestic aviation fuel market. “For seven years we have been struggling with this near-monopoly on this market. Now we will become the second major provider of aviation fuel in Poland,” Olechnowicz said.

As a result of carrying out its 10+ Program—the largest investment project in Polish industry in the last 20 years— the Lotos group increased the processing capacity of its Gdańsk refinery from 6 million to 10.5 million metric tons per year. Last year, the refinery produced over half a million tons of aviation fuel, which allowed Lotos Tank to strengthen its position on the aviation fuel market. Apart from Warsaw’s Chopin Airport, Lotos Tank also operates at Gdańsk’s Lech Wałęsa Airport and is preparing to launch operations at Cracow’s John Paul II Kraków-Balice International Airport. Lotos Tank also supplies fuel to airports in Wrocław and Rzeszów, which handle refueling operations on their own.

Lotos says it is also interested in selling aviation fuel at airports in other European countries. “Launching a team-up with Air BP not only allows Lotos to develop competitively in Poland, but also, and more importantly, provides a great opportunity for foreign expansion, one that we will certainly take advantage of,” said Maciej Szozda, Vice-President of the Management Board and Chief Commercial Officer at Lotos Group.
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