Dominant Polish fuel firm PKN Orlen was set to begin due diligence on Tuesday, February 3 on its key Czech acquisition target, the petrochemical group Unipetrol, Orlen vice-president Janusz Wisniewski told reporters Monday (February 2).

"Tomorrow we begin due diligence of Unipetrol, but since some assets of the company carry debts, the negotiations with the banks will be the most significant," Wisniewski said, adding Orlen's advantage was in its experience with the chemical division.

The first phase of due diligence will take two weeks, though Orlen expects a further examination of the company.

"I can't imagine that we would have only two weeks for due diligence of such a huge company," Wisniewski said.

Orlen, its Hungarian counterpart MOL and global oil major Royal Dutch/Shell have until mid-April to submit binding bids in the privatization of Unipetrol, for which the Czech authorities are offering 63%. One of the three shortlisted firms is then to be named winner by the end of April.

Orlen is trying to move into the driver's seat for its first serious move into Central Europe, a move it sees as key in its desire to become a regional fuel company. Orlen has lined up potential cooperation with U.S. oil giant ConocoPhilips, which owns 18.3% of Ceska Rafinerska, a refining unit of Unipetrol, and is in talks with MOL on strategic cooperation and a potential merger. The company also remains close to Czech firm Agrofert Holding, with which Orlen bid in the Czech Republic's prior attempt to sell Unipetrol.

The Unipetrol holding consists of the parent company Unipetrol, the 100%-held petrochemical holding Chemopetrol, rubber maker Kaucuk, fuel retailer Benzina, refiner Ceska Rafinerska (51%), refiner Paramo (74%), and pharmaceutical firm Spolana (80%).

(Interfax 13.ii.04)