Contract between Mero and Orlen Unipetrol expires, but oil deliveries to Czechia continue

The oil transportation contract between state-owned company Mero and refinery company Orlen Unipetrol has expired, but oil deliveries will continue under temporarily set conditions. Mero terminated the contract a year ago, seeking to establish new terms for cooperation, and the notice period has now ended. The companies have yet to agree on new terms, and negotiations will continue, the Czech News Agency (ČTK) reported.

„Mero ČR is continuing negotiations with Orlen Unipetrol on setting the terms of a new contract for transporting oil to Czechia. We are updating the contractual relationship after eight years, so setting new terms of cooperation that reflect the current technological and economic situation on the market is a priority for both parties,“ Mero secretary Barbora Putzová told ČTK this week.

„Although negotiations with Mero are taking longer than we would like, we firmly believe we will be able to find a compromise acceptable to both parties. The issue is primarily about the Czech Republic’s energy security in terms of the stability, competitiveness and availability of oil products,“ Orlen Unipetrol spokesperson Pavel Kaidl said of the talks.

Although the companies have not yet signed a new contract, oil transportation will continue after the current agreement expires. „The end of the current contract and negotiations on a new one have no impact on oil supplies to Czechia, which are continuing smoothly and without any problems. Until a new contract is signed, oil transportation will be governed by temporarily set conditions,“ Putzová said. According to ČTK, the temporary conditions are based on an independent analysis, under which payments for oil transportation are expected to be somewhat higher than before.

In 2023, 7.4 million tonnes of oil flowed into Czech refineries. Around 58 percent of last year’s imports consisted of oil transported via the Druzhba pipeline, which runs from Russia. The remainder was supplied via Germany’s IKL pipeline, which connects to Italy’s TAL pipeline.

Mero is currently preparing to expand the TAL pipeline, after which the Czech Republic is expected to become independent of Russian oil. Orlen Unipetrol has also confirmed preparations for switching away from Russian oil deliveries; according to the company, its Litvínov refinery is already technologically ready to process alternative oil blends.