MOL targets regional expansion, buys 23 stations from Shell Romania

Hungarian oil group MOL signed a contract for buying 23 Shell gas stations on the Romanian market in Budapest on Tuesday night, following a secret deal whose value remains undisclosed.

Shell sold the stations because they were not meeting its group-wide financial performance criteria.

The Shell-MOL transaction is the first such deal on the Romanian retail market after 1990 and sources on the market estimated it to be worth about $25 million. Still, the deal does not impact on the market structure in any way, but induces a swap in positions between the medium-sized players on the market.

Anglo-Dutch giant Shell, the world’s number two oil group had carried out talks with several players on the retail fuel market over the last few months in order to sell part of its gas station network, and eventually picked MOL. The deal is to be completed in the second half of this year and be submitted to the Competition Council for approval.

The transaction between the two operators actually has them swapping places, as the number of Shell stations has gone down from 81 to 58 following the sale and MOL moves up to fourth place on the market due to its 73 gas station network. MOL is the second leading multinational on the Romanian oil market, behind the Russians at LukOil (146 stations).

Moreover, the deal could be more meaningful: MOL’s expansion by such an acquisition shows the Hungarian operator speculates just every good opportunity on the market and may be one of the bidders for the controlling interests in Petrom. Shell on the other hand, is more concerned about the drastic cut in the costs of its gas station network and on breaking even this year, after having posted losses almost every year since 1992.

“We signed the contract, but I cannot disclose the value of the transaction for mutual confidentiality reasons. Anyway, MOL’s expansion strategy will continue, we already have four stations under construction, so that our network will probably comprise 77-78 stations by yearend. The stations bought from Shell will be integrated in our network and brought up to our standards. It is about stations from all over the country, where we are not running our own gas stations,” Aliz Kosza, executive manager of MOL Romania Petroleum Products SRL, the branch of the Hungarian group told Ziarul Financiar. She added the goal announced, i.e. national coverage and more than 10% in market share in Romania, could be attained in the medium run given the new circumstances, instead of the long run as before. adrian.mirsanu@zf.ro