Russia''s LukOil business likely to exceed $2bn

Russian oil group LukOil is likely to see its turnover on the Romanian market reach around 2 billion dollars (1.6bn euros) this year, sources within the company say.

This will see the Russian company compete for the second position on the oil market alongside the Rompetrol group, which is run by businessman Dinu Patriciu. The number one spot is held by Petrom.

LukOil”s plans for the future – including the acquisition of chemical plant Oltchim Ramnicu Valcea and the expansion of its filling station network – will see it become a market player the size of Petrom, which recently entered the portfolio of Austrian group OMV.

During the last three years, the Russian group enjoyed the highest growth on the market compared with its rivals. In 2002, LukOil had a network of around 20 petrol stations and a refinery at which operations had been halted. There were also rumours on the market regarding a possible sale of the Petrotel refinery.

LukOil Downstream, which currently runs a network of up to 300 stations, as well as several wholesale fuel warehouses, turned over close to 600 million dollars (480 million euros) in the first seven months of the year, 20% higher than the turnover posted for 2004, the same sources maintain.

In less than four years, the company”s turnover has grown 24-fold. (In 2001 LukOil Downstream had a turnover of 20 million euros.)

Its petrol station network is now 15 times larger, and the refinery is operating at full capacity, serving not only the domestic market, but also markets across the region.

LukOil Romania”s business is made up of LukOil Downstream (petrol stations and warehouses) and the Petrotel Ploiesti refinery. In addition to this, the LukOil parent company also delivers to branches and third companies on the Romanian market.

The Petrotel refinery – one of the top five refineries on the market – resumed operations last autumn following a modernisation programme entailing the investment of 283 million dollars for the production of Euro-3, Euro-4 and Euro-5 fuel, company officials said.

LukOil”s refinery in Romania is working at full capacity this year, serving not only the domestic market, but also exporting to Hungary, the Republic of Moldova, Ukraine and (more recently) Serbia.

According to the LukOil Romania website, the Russian group will be one of the largest private contributors to the state budget thanks to an expected 835 million dollar contribution, some five times more than last year and also an indication of a considerable surge in company activity.