Russian oil major Lukoil is mulling selling its refineries in Europe, including those in Bulgaria and Romania, on the grounds these are no longer strategic assets as the company is focussing on exploration and production, the company’s CEO Vagyt Alekperov said in an interview with Russian media group RBC published on June 16.
Alekperov’s remarks were made in the context of the industry being politicised. Lukoil has encountered a number of significant challenges, especially in Eastern Europe, primarily in Ukraine, which led the company to sell its retail chain in that country, Alekperov explained. The company also sold its assets in the Baltic States. In Romania, Lukoil is involved in a trial opened more than a year ago. Lukoil also owns refineries in Italy and the Netherlands.
"These aren’t assets that are strategic for us at present, we have been focused mainly on exploration and development of oil and gas fields in recent years,” Alekperov declared. He said he expected an oil price in the range of $60 per barrrel, despite the sharp growth in global production.
Lukoil can collect its downstream assets in a single European company that would be quoted on the stock exchange, or the company could even consider, in the medium term, selling all or part of the assets. In recent years, we have concentrated on the exploration and development of oil and gas fields, Alegperov told RBC.
A court in Ploiesti admitted on April 18 the start of the trial of Petrotel Lukoil Romania and members of its top management on tax evasion and money laundering charges.
Romanian prosecutors announced August that they had completed their investigations into alleged fraud at the local Lukoil refinery and indicted the Russian-owned Petrotel refinery, its Russian director-general and five other officials. Prosecutors estimated the losses to the state at RON 7.6bn (€1.76bn), and seized shares and bank accounts of companies belonging to the Lukoil Group worth €2bn.
Lukoil’s Romanian refinery, is small, with a capacity of below 3mn tonnes per year. It employs less than 500 people, while the distribution network employs another 2,000-3,000. The refinery’s overall importance to the Russian company is relatively low, particularly after Lukoil upgraded its Bulgarian refinery in Burgas in 2014.
In February, Bulgaria’s Commission for Protection of Competition (CPC) launched an investigation into the pricing policies of Lukoil’s oil refinery and fuel retailer, as well as six other fuel retailers. Bulgaria’s sole oil refinery, Lukoil Neftochim Burgas has an annual capacity of 9.8mn tonnes and is the largest refinery on the Balkan Peninsula in terms of crude oil processing capacity. The refinery is the biggest company in Bulgaria in terms of revenues, which amounted to BGN5.3bn (€2.7bn) last year, Capital Daily reported.