Orlen must decide whether to modernise the Mažeikiai refinery or risk closing it

Poland's oil group Orlen has to decide whether to continue modernising the Mažeikiai oil refinery in Lithuania, the only oil refinery in the Baltic states. Without the project, the plant may have to be shut down. This was said by Fanfara in comments to PAP Biznes, the economic and financial news service of the Polish news agency PAP.

What the decision hinges on

Modernisation would extend the refinery's operating life by more than ten years. According to Fanfara, the key question is whether Orlen Lietuva, the company running the refinery, could cover the costs itself without extra support from its Polish parent. Unofficial information suggests that 600–700 million US dollars are needed to complete the work.

Over the past 20 years Orlen has invested more than five billion dollars in buying and upgrading the refinery, while Orlen Lietuva earned about one billion dollars in profit over the same period. Fanfara considers a return on the investment unlikely and pointed to the plant's distance from major markets.

Termination of the construction contract

In November 2025 Orlen Lietuva terminated its contract with UK-based energy services firm Petrofac for building a residue conversion unit, citing delays and Petrofac's inability, because of financial difficulties, to pay Lithuanian subcontractors on time. The 641 million euro contract had been signed in October 2021, and about 80% of the project was complete when it ended. In 2023 the projected cost rose by 45% to around 970 million euros. Orlen Lietuva is claiming 104 million euros from Petrofac in the Vilnius Commercial Arbitration Court.

Company figures

Last year Orlen Lietuva's revenue fell 5% to 6.08 billion dollars, and it posted a net profit of 26.5 million dollars after a net loss of 744.5 million the year before. It is Lithuania's largest taxpayer and employs more than 1,500 people.