A subsidiary of Polish energy group Orlen has launched an arbitration claim for €104 million against Petrofac, the UK engineering contractor whose financial collapse left a major Lithuanian refinery upgrade unfinished. Global Arbitration Review reported the claim on 4 September 2026.
The dispute stems from a contract worth roughly €1 billion to modernise the Mažeikiai refinery, Lithuania’s only oil refinery, run by Orlen Lietuva. GAR’s summary does not name the claimant subsidiary, the arbitral institution or the seat; Orlen Lietuva is the company that terminated the contract, according to the Lithuanian news agency BNS.
Why the contract was ended
Orlen Lietuva terminated the agreement in November 2025, BNS reported in April, citing Petrofac’s financial difficulties, which had caused repeated delays and late payments to Lithuanian subcontractors. Work had been halted in the autumn of 2025. Subcontractors said payments stopped altogether after an administrator was appointed to Petrofac in late October 2025, and Orlen Lietuva stepped in to pay €3.1 million of Petrofac’s debts to local firms.
By then about 80% of the project was finished, Orlen Lietuva representatives said. The upgrade, designed to let the refinery process crude more efficiently, was originally due for completion in September 2025, then pushed to September 2026. Lithuania’s energy minister Edvinas Grikšas said in April it would now run into 2027, and that a new general contractor was to be chosen to take over Petrofac’s obligations.
When a main contractor fails late in a megaproject, the owner pays twice: once to finish the work and again to chase the money in arbitration.
A claim against a weakened defendant
GAR describes Petrofac as embattled. With an administrator appointed to Petrofac in late 2025, according to BNS, it is unclear how much any award could actually recover.
What to watch
- Which institution hears the claim and whether Petrofac’s administrators contest it.
- Whether a replacement contractor finishes the Mažeikiai upgrade on the 2027 timetable.
- Further claims by Lithuanian subcontractors left unpaid by Petrofac.
