The offer made by oil and gas company OMV (Vienna / Austria; www.omv.com) for MOL (Budapest / Hungary; www.mol.hu) – see Plasteurope.com of 01.10.2007 – has sent ripples through the oil, energy and petrochemicals markets of central and eastern Europe. The battle for power and easy money appears to be intensifying, and a political thriller is unwinding that could have a major influence for plastics markets in the region.

The ostensibly long buried hostility between the former central European power Austria and the "Russian Bear" appears to be resurfacing, while other antagonisms of the past – between Austria and Hungary or Poland, for example, or Poland and Lithuania vis a vis Russia – also seem to be rearing up again. The Hungarian government, for example, is trying to pass a law that would prevent the MOL takeover after having – in the end – successfully fought a takeover of the company by Russian investors.

Lame-duck Polish prime minister Jaroslaw Kaczynski contributed to the increasing political tension in the region with his recent call for a takeover of Polish petrochemical giant PKN Orlen (Plock / Poland; www.orlen.pl) by the much smaller 59% state-owned Grupa Lotos. PKN already had swallowed Czech petrochemicals producer Unipetrol, just as MOL had grabbed Slovakia’s Slovnaft. In the meantime, however, the PKN takeover looks unlikely to succeed, as Kaczynski’s party lost the Polish parliamentary elections on 21 October. Before the vote, the "Civic Platform Party", which will form the new government, rejected the plan, which would have been tantamount to a re-nationalisation of the country’s petrochemicals industry.

Kaczynski evidently was trying to foil an impending hostile takeover of PKN by an as yet unidentified Russian energy company. According to the supervisory authority of the Polish stock exchange, 9% of PKN's capital (the Polish state still holds a total of 28%) has been systematically bought up over the past few weeks.

Because of their difficult past – and present – the Poles are watching developments in the industry with considerable suspicion. The planned Russian-German gas pipeline, which skirts Polish territory, is just one example of the discord between Poland and Russia. Regional tension was fuelled further last year by a dispute between PKN and Russia’s Rosneft over the Lithuanian Mazeikiu Nafta refinery. PKN managed to retain the upper hand, but subsequently the Russian oil pipeline supplying the refinery unexplainably broke down, forcing it to shut down for a year due to a lack of oil.

Lithuania is fighting back with its own weapons. The country wants to pass legislation stipulating that the refinery may be returned to Lithuanian ownership at any time. Neither the prospect of a politically-driven Polish state-owned company nor a PKN dependent on Russian oil would be likely to please the Lithuanians.

The next few weeks and months will show which way the pendulum will swing in the hotly contested markets of central and eastern Europe. It will be fascinating to watch, as many promising petrochemical projects are also planned in Romania and Bulgaria. Here, however, the local “troops” are thought not quite strong enough to take up the battle with OMV or Lukoil as Poland and Hungary did.