Gas stations expanding in full gear

Oil operators are looking to get a good position on the oil market, investing tens of millions of dollars into the expansion of their gas station networks, before a big time player replaces Petrom and tilts the balance. The privatisation of SNP Petrom, the largest company on the Romanian market, will change the look of the oil industry, following the deregulation of the market and the increased competition on this segment.

Petrom has been operating on the market for a few years and has about 700 fuel retail stations. Whereas the second player on the market at the end of 2001 was Shell (81 stations), the retail landscape has changed a great deal in only two years, because a number of companies have been catching up fast. These companies include Lukoil (from 20 stations in 2001 to 300 stations in 2004), Rompetrol (300 stations by the end of 2004), MOL (which bought 23 stations from Shell) and OMV, each of them investing tens of millions of dollars in attaining a “top” position on the market.

Furthermore, OMV and MOL are engaged in the race for Petrom, and the Austrian group is very well regarded on the market in view of this transaction.

“We want to position ourselves as good as we can until the privatisation of Petrom, after which the competition on this segment is expected to receive a boost,” says Eric Kish, private oil group Rompetrol’s development and acquisitions vice-president.

Rompetrol Downstream, the retail division of the group headed by businessman Dinu Patriciu, announced it would invest approximately $50 million in expanding the gas station network to 300 units by the end of the year, at which time Petrom should have already become private property.

Rompetrol was operating a 180-station network at the end of last year, 60 of which were directly held, while the rest were run by distributors.

The expansion of the Rompetrol network will take a West-Northwest route, with locations in the “traditional” area in Eastern Romania scheduled for reopening, as well.

Rompetrol Downstream’s representatives estimate turnover to progress by 50% to $330 million. The company last year made more than $4 million operating income and $220 million turnover, preliminary data show.

Rompetrol, the leading private oil operator in Romania accounts for 32% of the domestic oil products market. The group, which holds Petromidia and Vega Ploiesti refineries, in 2003 logged operating income of $30 million at a $1.2bn turnover, up 20% from 2002. Its 2004 revenue target is $1.6bn.
adrian.mirsanu@zf.ro