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LUKOIL Won’t Construct Refinery in Turkey 11 mars 2007

Posted by Acturca in Caucasus / Caucase, Energy / Energie, Russia / Russie, South East Europe / Europe du Sud-Est, Turkey / Turquie.
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Kommersant (Russia)

Mar. 06, 2007

LUKOIL has abandoned the plans to take part in refinery’s construction in Turkey. Instead, it will extend the capacity of its Burgas plant in Bulgaria, LUKOIL President Vagit Alekperov told the reporters, ITAR-TASS reported.

LUKOIL intended to construct a refinery in Zonguldak port of the Black Sea, Turkey, and was to invest $2 billion to $2.5 billion in it. The annual capacity of the facility was estimated at 8 million tons to 10 million tons of crude oil.

Alekperov said LUKOIL counts on collecting by June all antimonopoly sanctions for Europe’s chain of filling stations that it bought from the U.S. Conoco.

The buyout of Conoco’s stake in Czechia’s refinery (belongs to Ceska Rafineska) is still deliberated, as today’s holders of the enterprise may use their right
of first refusal for the 16-percent ownership of the U.S. company, PRIME-TASS reported.

On February 21, 2007, the European Commission sanctioned LUKOIL’s acquisition of a filling station chain from the U.S. ConocoPhillips. The deal budget exceeds $400 million. The chain includes 380 filling stations operating under the Jet brand in Belgium, Czechia, Finland, Luxembourg, Poland, Hungary and Slovakia.

LUKoil Scraps Plans to Build Turkish Refinery, Will Expand Bulgarian Refinery Instead

Global Insight, March 7, 2007

Andrew Neff

LUKoil President Vagit Alekperov said yesterday that the Russian oil major is no longer planning to build a refinery on Turkey’s Black Sea coast, opting instead to expand an existing refinery owned by the company in Bulgaria. LUKoil said last year it was looking to build a new 200,000-b/d refinery at Zonguldak on Turkey’s Black Sea coast, but Alekperov said that poor economics made it more sensible for the company to expand its existing refinery at Burgas on Bulgaria’s Black Sea coast (seeTurkey: 11 July 2006: ). LUKoil will seek to expand the Burgas refinery from 150,000 b/d at present to 200,000 b/d, according to Alekperov. The LUKoil chief, who owns an estimated 15% in the company, also sought to dismiss speculation that he and other major stakeholders might swap shares in LUKoil for stakes in ConocoPhillips in order that the U.S. supermajor, which has a 20% stake in LUKoil, could increase its shareholding in the Russian oil firm to 25% or more.

ConocoPhillips agreed to limit its participation in LUKoil to 20% as part of a September 2004 deal with the Russian government to acquire the state’s remaining minority stake in the firm. Alekperov also said that LUKoil has no plans to bid on the assets of fellow Russian oil firm Yukos, which is being liquidated as part of its bankruptcy process.

Significance: LUKoil’s abandonment of the Turkey refinery plans do not mean that it plans to give up on its goal of expansion in the Turkish retail fuel market, Alekperov said that LUKoil wants to expand its network of stations there to 500 filling stations, presumably supplied by the Burgas refinery in Bulgaria, although Alekperov gave no timetable for the expansion of Burgas, which could limit LUKoil’s downstream expansion in Turkey. LUKoil has been frustrated in its attempts to buy refining assets in Europe, but the company has shown little interest in Yukos’s refineries in Russia. LUKoil is still eyeing ConocoPhillips’ stake in Czech refiner Ceska Rafinerska, although other existing shareholders in the company are likely to pre-empt LUKoil.

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