Poland's PKN Expects First Saudi Oil Delivery in Nov

Poland's biggest refiner PKN Orlen, looking to ease its reliance on Russian supplies, is expecting its first delivery of Saudi Arabian oil at the start of November, calling it a step towards closer cooperation.

"We are ahead of a tender that may lead to a new long-term contract. Our procedures say that we test the potential suppliers before signing. I hope this will be the beginning of a more intensified cooperation," PKN's chief executive Jacek Krawiec told a news conference on Thursday.

PKN Orlen buys most of its oil under long-term contracts, with one third of the crude coming from the spot market.

The company's two major long-term oil supplies contracts, with Mercuria and Rosneft, expire by mid-2016 and PKN plans to use this opportunity to diversify its oil supplies, which now come mostly from Russia.

"The offer is attractive," Andrzej Kozlowski, PKN's executive director for strategy said when asked whether Saudi oil is cheaper than Russian. He added that the November delivery will amount at 100,000 tonnes.

Apart from looking to buy oil from Saudi Arabia, PKN said it will also be interested in buying from Iran, once sanctions on the country are lifted in the first quarter of 2016.

"Saudi Arabia wants to secure market share before Iran comes back to the market," Kozlowski said.

PKN said it is difficult to say when a new long-term contract will be signed, but the chief executive signalled the company may look to depend more on spot markets.

It also said on Thursday third quarter net profit rose 48 percent year on year to 795 million zlotys.

Last week, the head of Russia's biggest oil company Rosneft said Saudi Arabia had started supplying crude oil to Poland, a market traditionally dominated by Russia.

"It is in the Russians' interest to secure cash due to their budget problems. We do not expect a fall in Russia's oil supplies to Poland," Krawiec said.

"There are deliveries from Saudi Arabia, soon there will be Iranian supplies. As the demand globally is not record high, producers are trying to sell the oil anywhere," Krawiec added.

(Reporting by Agnieszka Barteczko)