Their competitors will likely be Lotos's biggest peer PKN Orlen and natural gas and oil extraction firm PGNiG, who would file their bids for Grupa Lotos, if asked by the treasury ministry, another source told the dailies (both published by Presspublica).

They quote PKN Orlen's CEO Jacek Krawiec as saying that he has to follow the government's strategy for the oil sector, under which Orlen and Lotos could not merge. However, the newspapers have learnt that in March, the document is due to be updated.

They also quote the treasury ministry's spokesman Maciej Wewior as saying that the state was considering a scenario of lowering its stake in Grupa Lotos to below 50% (from current 53.19%), but it would require changes to both the firm's statute and the government scheme; he stressed, though, that it would mean selling the entire stake, but rather - reaching an arrangement similar to that applied in PKN Orlen. The treasury now holds 27.52% in Orlen and is the biggest shareholder, with a crucial say on all key posts and decisions.

PGNiG's CEO Michal Szubski told the dailies that his firm would only ponder whether to submit an offer if the treasury announced an invitation to tender.

In January, after placing 14mn (10.8% of capital) in Grupa Lotos with financial investor, through the bourse, the state treasury announced an 180-day lock-up on further withdrawal from its stake in the oil firm.

After this sale, deputy treasury minister Mikolaj Budzanowski told the ISB news agency that the state still wanted to sell a further stake in Grupa Lotos to a strategic investor or one with upstream activity and was ready to lower its stake to below 50%.

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