28 July 2009

Global perspectives: Oil, gas deals in Europe

By Cris Whetton

KazMunaiGaz, the second largest Kazak oil producer, acquired Amsterdam-based Rompetrol Group N.V., the second largest oil and gas group in Romania, after buying the remaining 25% of stock for an undisclosed sum from Romanian tycoon Dinu Patriciu, who temporarily remains chief executive.

Rompetrol Group operates in 13 countries including Romania, Bulgaria, Serbia, Montenegro, Albania, and Turkey. In Romania, Rompetrol operates about 450 fuel stations and owns the Petromidia oil refinery in Navodari with a processing capacity of 14,000 metric tons of crude per day.

Hellenic Petroleum, Greece’s biggest refiner, agreed to buy gasoline and storage assets from BP plc for $510.5 million (€359 million). The deal, which includes net debt of $56.9 million (€40 million), gives Hellenic control over BP’s 1,200 gas stations and oil storage facilities with a capacity of 170 million liters. This deal would create a market leader in the fragmented retail fuel market, which consists of 21 companies, with none having a market share above 20%, according to figures by research institute IOVE.

Meanwhile, in Azerbaijan, state oil company SOCAR started design engineering of an oil refinery to go up in Izmir for Petkim, said Rovnag Abdullayev, president of SOCAR and chairman of the Petkim Holding Board. The new refinery will increase productivity of Petkim as the company will invest $4 billion in the refinery, Abdullayev. SOCAR owns 51% stake in Petkim Holding.

Spain’s Tecnicas Reunidas and France’s Technip won contracts to work on a refinery in Saudi Arabia, Saudi Aramco officials said. Aramco did not detail the value of individual contracts, but confirmed the overall cost of the refinery stood at $9.6 billion.

Oil Refineries Ltd., Israel’s largest oil refiner, said it activated the first stage of its Mild Hydrocracker unit. The first stage should increase diesel and kerosene production by over 1.5%, contributing an additional 120,000 metric tons of produced middle distillates per year. The second stage of the Mild Hydrocracker should increase production capacity by a further 1.5%. Total investment over both these stages is $62 million.

Meanwhile, Italy’s Eni SpA said it was assessing the offers it had received for its 84,000 bpd Livorno refinery and did not expect to make a decision before the end of the summer. “We are in no rush as this is a strategic step,” said Angelo Caridi, head of the refining and marketing division. Caridi implied that no decision would occur “before the end of the summer”. In February, Eni Chief Executive Paolo Scaroni said the company was looking at the possibility of selling the refinery, located on the Tuscan coast, which mainly produces gasoline and diesel fuel.

Cris Whetton is InTech’s European correspondent.