LUKOIL’s acquisition in Turkey
LUKOIL has acquired eight oil product terminals with the total capacity of 300,000 m3 in Turkey. Six of the acquired terminals have have access to the sea shipment routes. Three of the eight oil terminals are connected to the TUPRAS refinery by a product pipeline network. According to LUKOIL President Vagit Alekperov, the transaction value exceeded $500 million.
Foreign assets
On July 28, LUKOIL subsidiary Lukoil Eurasia Petrol A.S. specializing in bunkering operations, wholesale and retail trading of oil products and petrochemicals, signed an agreement in Istanbul on acquiring a 100% interest in Akpet accounting for about 5% of the Turkish retail market.
Besides oil product terminals acquired assets include five LNG storage tanks with the total capacity of 7,650 m3; three jet fuel terminals with the capacity of 7,000 m3; motor oil production and packaging plant with the capacity of 12,000 tonnes per year and a network of 693 gas filling stations.
According to Vagit Alekperov, “acquisition of large retail assets in Turkey expands LUKOIL international retail network by 18%. It is one of the key elements of the Company’s downstream strategy in the Black Sea and Mediterranean markets, aimed at supply of our products to end users with high added value”.
As of the end of the year LUKOIL owned almost 6,000 fuel stations all around the world with Russian stations accounting for a little bit more than 30%. With the new acquisition the company will own almost 4,830 stations. Analysts do not rule out the possibility of more acquisitions in Turkey. Two years ago the company announced the intent to occupy up to 20% of the market in Turkey.
To optimize the route
According to press center of LUKOIL, oil products will be delivered to the newly-acquired fuel stations from the two refineries: LUKOIL Neftochim Bourgas in Bulgaria and ISAB in Sicily 49-pct share of which was acquired by LUKOIL in June of the current year. ISAB annual capacity is 16 million tonnes of oil with LUKOIL accounting for 8 million tonnes of oil per year.
According to Natalya Milchakova, analyst of OTKRITIE Financial Corporation Ltd., earlier acquired ISAB complex will “partially help LUKOIL in the route optimization and delivery of oil products from Italy to Turkey via the Mediterranean Sea without entering overloaded Bosporus.”
As of today, experts say Turkey is quite a promising market. Consumption of oil products in Turkey makes some 19 - 20 million tonnes per year with 70% falling on diesel fuel and the rest – on heavy fuel oil and petrol. Italian ISAB is designed for refining of heavy crude and production of petrol and diesel fuel, while LUKOIL’s refinery in Bourgas may produce 25% of petrol with the rest facilities designed for production of diesel fuel and heavy fuel oil. “We assess the value of Akpet at some EUR 0.9 – 1.3 billion. We think it cost LUKOIL several times less as compared with construction of its own refinery”, Milchakova says.
Sophia Vinarova