November 5, 2013 / 3:54 PM / 5 years ago

UPDATE 1-Polish refiner Lotos buys North Sea licenses

* Lotos buys shares in Norway oil, gas licences for $176 mln

* Eyes further acquisitions to take advantage of tax shield

* Shares in Lotos rise in bearish market

By Agnieszka Barteczko and Chris Borowski

WARSAW, Nov 5 (Reuters) - Poland’s No.2 oil refiner, Lotos , agreed to buy shares in 14 oil and gas licences off the coast of Norway for $176 million and is looking for further targets under a plan to boost production and diversify its upstream operations.

“Thanks to this transaction, Lotos is doubling the volume of hydrocarbons output and increasing its resources of oil and natural gas,” Lotos deputy head Zbigniew Paszkowicz told reporters on Tuesday.

Problems at Lotos’s ill-fated North Sea oil platform Yme resulted in a 1.07 billion zloty ($346 million) tax benefit for the Polish company, which helped it buy shares in the Norwegian licenses from Britain’s Centrica.

The state-controlled refiner also bought a 5-percent share of the Norwegian Heimdal gas hub as part of the deal.

Lotos planned the takeovers for several months and expects to close them by the end of the year once it receives the necessary approvals from Norwegian authorities.

According to Lotos, the license shares will raise its production by about 240,000 tonnes of oil equivalent (toe) a year, compared to 265,000 tonnes that Lotos produced in 2012.

The company aims to raise its annual output to 1.2 million by 2015 and is targeting further acquisitions in the North Sea to continue benefiting from the tax shield in Norway.

“We are looking around. Considering the taxation, the best time for acquisitions is the end of a year,” Paszkowicz said when asked if the next transaction could be expected in the first half of 2014.

Lotos is also looking to sell its 20-percent stake in the troubled YME platform, with the sale possible next year, Paszkowicz added.

At 1513 GMT, shares in Lotos were up 1.6 percent, while the Warsaw bluechip WIG30 index was down 0.9 percent.

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