Integrated Annual Report 2020

Modernity and efficiency in oil extraction  and processing

To improve commercial efficiency, we constantly optimise refinery and logistics processes.

Our core activities focus on three areas:

  • prospecting for and extracting hydrocarbons
  • processing of crude oil
  • trade in petroleum products

The objective of this area is to obtain and exploit crude oil and natural gas deposits and the related ancillary, transport and service activities.

We are the only concern in the Polish Exclusive Economic Zone of the Baltic Sea engaged in extraction. Outside Poland, we extract raw materials on the Norwegian Continental Shelf and in the territory of Lithuania.

The objective of this area is the processing of raw materials and manufacture of crude oil refining products, as well as their wholesale and retail sale and ancillary, transport and service activities.

In 2020, the commercial activities of the LOTOS Group were carried out within the Grupa LOTOS and its subsidiaries: LOTOS Paliwa, LOTOS Oil, LOTOS Asfalt, LOTOS-Air BP. We are efficient — the new technologies we use in production processes allow us to process as much as 95% of each barrel of oil into high-quality fuels. The remaining 5%, so-called heavy processing residue, is used to produce asphalt, which we sell to our business partners.

While efficiently responding to sudden, extraordinary events is part of the Supply Chain Optimisation Division’s daily routine, their scope and dynamics in 2020 were extremely challenging. The dramatic fall in margins on crude processing, middle distillates in particular, and the collapse in fuel demand in the spring required us to respond quickly and implement a whole range of non-standard measures to adjust our refinery operations. Due to the rapid changes in the external landscape, we increased the frequency of our meetings and deepened market and optimisation analyses. The events of 2020 provide us with valuable experience for the future.

Zbigniew Sobolewski
Supply Chain Optimisation and Market Information Director

Map of the Extraction Area of the LOTOS Group

The most challenging task facing the Procurement Division in 2020 was to contract materials and services for LOTOS technical and production teams for the purposes of the 2021/2022 maintenance shutdown. The fact that the full scope of the planned maintenance works were performed on schedule proves that we rose to the challenge. As a manager, I am m particularly pleased with the positive feedback from external institutions, including the Polish Supreme Audit Office, which in 2020 audited 1,800 procurement procedures carried out between 2016 and 2020, finding no irregularities.

Łukasz Magin
Procurement Director

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