Poland fires gas company CEO

By bne IntelliNews April 30, 2013

bne -

Shares in state-controlled Polish gas company PGNiG dropped on April 29 as it announced CEO Grazyna Piotrowska-Oliwa had been fired. While the move was widely expected in the wake of the dismissal earlier this month of the treasury minister who appointed her, the market sees rising risk that the company will be pushed into decisions more political than economic. Meanwhile, the questions over the country's shale gas push grow bigger.

Less than two weeks after Mikolaj Budzanowski was sacked from the treasury - which holds state assets - for the failures of Polish state-controlled companies in implementing the government's ambitious drive to develop the country's energy independence, the supervisory board at PGNiG also decided at a meeting to fire Deputy CEO Radoslaw Dudzinski, Prime Minister Donald Tusk told reporters. "The supervisory board has started a contest to pick new management," he added.

PGNiG said in a statement that the board had lost confidence in the CEO. The PM had said earlier in the month that Budzanowski was dismissed for failing to inform him about a memorandum on a pipeline deal that PGNiG signed with Russian gas exporter Gazprom. However, it also came as several major projects to build new electricity capacity were withdrawn or announced as at risk from the state's push for a range of state companies to invest in projects such as shale gas exploration and the country's first nuclear power plant.

Piotrowska-Oliwa said all her actions related to the memorandum were lawful and accordance with her responsibilities to shareholders. "I don't treat today's decision to dismiss me as based on the merits of my work as the chief executive," she said. PGNiG shares closed 1.9% lower, compared with a 0.4% rise on the main Warsaw index, reports Reuters.

That drop reflects growing concern that Polish state companies are being pushed into political projects, putting their financing and performance at risk. As foreign investors lost their enthusiasm for the country's shale gas push last year, PGNiG was charged with leading a posse of its peers - including utilities, oil refiners and copper miners - to take their place.

Piotrowska-Oliwa, appointed as PGNiG CEO by Budzanowski in March 2012, was a leading proponent. She had planned to increase the company's gas output by 41% by 2015, reports Bloomberg, and raise spending on shale gas exploration, to the detriment of other projects. On the one hand, the results of drilling tests have yet to reveal commercial flows. On the other, there is speculation that Warsaw has changed tack, and the recent casualties are a sign that the shale gas push is over as far as senior officials are concerned.

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