According to the media, Petrol’s subsidiary Geoplin, might run into problems in November and December if Russia stops supplying gas altogether. It is estimated they would need between EUR 100-140m in liquidity, which would indicate a loss of around EUR 100m. According to the media Petrol’s Supervisory Board will meet again on October 14 and 18 to decide on Geoplin, and on October 20, a meeting of the shareholders of Geoplin has been called, where they will vote on the capital increase of Geoplin.

There were recent talks about the need for liquidity and capital for Petrol’s subsidiary Geoplin, which you can read here. According to the media, the subsidiary might run into problems in November and December if Russia completely stops gas altogether. In this scenario, the company would need between EUR 100-140m of liquidity. This is calculated by arriving at a loss of c. EUR 100m in this year for two months of gas procured at a price of EUR 200 per megawatt-hour. This scenario was calculated using last year’s purchase gas quantities for the last two months of the year, which is app. 700,000 MWh. This is all calculated based on an assumption that Geoplin would make this purchase, which is not yet certain, especially the entire amount.

For Geoplin there is no other source for purchase except Gazprom and the gas need to be delivered to end suppliers. It is important to note that Geoplin had a profit at the end of August and September. We can conclude from this that the quantities for October are taken care of. Since the end of September, the price of natural gas on the market has been falling. Currently, it is still below EUR 160 per megawatt hour.

Since the adoption of the state guarantee law for liquidity funds for the purchase of energy products, there was already a negotiation regarding revolving credit with a syndicate of six banks led by NLB. Banks were ready to give credit, but Petrol was not ready to provide its share of the liquidity for Geoplin, while 80% of the total loan is state-guaranteed. If Petrol was to secure the potential need for liquidity, it would worsen its credit rating which is important for the efficient performance in the activity of buying and selling fuel as well as other products. So the current scenario is a capital increase or potential nationalization of Geoplin. Petrol said that “potential capital increase is a consequence of the lack of supply of Russian gas and significantly more expensive replacement purchases at current market prices. The assumptions are based on different scenarios of gas price movements and physical gas shortages. The financial and legal review, on the basis of which the amount of potential recapitalization will be proposed, has not yet been completed, so they cannot give concrete amounts yet.” Petrol’s supervisors met on 6 October, and no decision was made. They only announced that any decisions related to this were planned for October. According to the media, Petrol’s Supervisory Board will meet again on October 14 and 18 to decide on Geoplin, and on October 20, a meeting of the shareholders of Geoplin has been called, where they will vote on the capital increase of Geoplin.

Geoplin key financials [EUR m]