Lukoil to sell Romanian marketing operations to MOL – sources

By bne IntelliNews March 17, 2014

Russian oil company Lukoil will gradually transfer to Hungarian peer MOL its Romanian marketing operations, including the car fuel deposits, Adevarul daily announced, quoting unofficial sources.

In a first stage, Lukoil will make preferential deliveries to MOL under a strategic partnership and afterwards the Russian company will sell the regional warehouses to MOL. While MOL holds a 13% shares on the car fuel market, Lukoil is the third largest player with a 22% share.

The daily does not comment on the fate of the Lukoil refinery in Romania. The refinery, with a capacity of 2.4mn tonnes of crude oil per year, is the third largest in Romania - among a total of three refineries. It has been running on constant losses, but this is not particularly relevant since refining is a thin-margin segment, while the profits are typically earned in exploration and production.

Rumours about Lukoil closing down its Romanian refinery have been circulated for years, but the refinery's shareholders rejected such an option in December. Still, with the Bulgarian refinery in Burgas coming online next year at higher capacity, the rumours are expected to gain more credibility.

Lukoil has re-assigned to the Romanian managing team Anatolie Zolotko, formerly a manager in Hungary, the sources explained. Separately, Lukoil has reportedly adjusted its Romanian regional fuel deposits to MOL standards, they added.

LUKOIL FOCUSES ON BULGARIA AND RENEWABLE: Lukoil will focus on the Bulgarian petroleum products market, once the Burgas refinery re-opens in 2015 after a large-scale upgrade, the daily furthers. Lukoil Neftochim Burgas plans to complete the refinery modernisation by the end of the year, with testing set to begin in 2015, making it only the 10th hydrocracking unit in the world and the largest in Eastern Europe. Separately, Lukoil will expand its renewable energy production facilities.

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