Foreign Direct Investment in Petroleum Sector in Poland

Bartlomiej Nowak
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Bartlomiej Nowak: European University Institute, Florence, Italy

Journal of Interdisciplinary Economics, 2004, vol. 16, issue 1, 57-76

Abstract: Based on the research, the investments made over the transition decade in the Polish petroleum market are insufficient. In 1995 Polish authorities expected that until the year 2010 in Polish petroleum – energy sector there will be investments of around US $38.5 billion. Until 2003 only 15% of that sum was invested in the sector. Additionally from US $65.1 billion, invested in Poland in years 1990–2002 only slightly over US $2 billion of the overall sum was allocated for the specific development of fuel station networks in Poland. At the present time the Polish petroleum market is comparatively less profitable than neighbouring countries where profit margins are higher. What is the reason for this? According to the study, there are at least few reasons explaining the worsening of development of the petroleum sector in Poland, than in other CEE countries. Firstly, a main obstacle is the delays in restructuring and privatisation of companies in the Polish petroleum sector. Secondly, complicated administrative procedures together with unclear laws. Thirdly, a lack of real competition due to the monopolistic position of PKN Orlen SA. However, research shows that despite the above mentioned problems and under-development of the Polish petroleum sector both the Polish market as a whole and the petroleum market are both large and attractive enough to attract greater amounts of foreign direct investment in the forthcoming years. Polish companies had big expectations at the beginning of the transition process. They were expecting that foreign investors will after investment, reshape their companies, increase their efficiency and competitive position through the transfer of modern technology and the introduction of new management techniques. It was also expected that investors would bring access to new markets, distribution networks and financing. These expectations were true. Research, practice, survey and interviews show that companies privatised through FDI began to show improvements in efficiency very rapidly as a result of an improved financial situation, more effective strategic planning and management.

Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:sae:jinter:v:16:y:2004:i:1:p:57-76

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