Anglo-Dutch giant Shell, world's third largest oil corporation has been negotiating the sale of its gas station business in Romania, now comprising 58 stations, for a while, market sources say. Shell Romania SRL's portfolio has already aroused the interest of two or three companies, including Hungarian MOL Group, the quoted sources add, who estimate the deal will be worth more than $70 million.
When contacted by Ziarul Financiar, Shell Romania's officials could not provide comment by the time the story was ready for print.
Market sources say the European oil giant actually made the decision to withdraw from the Romanian market last year, when it sold 23 stations to MOL, in a transaction market sources estimated at $20-$25 million.
"The Romanian fuel retail market has not been deregulated in over 14 years (since 1989 when the communist rule was overturned) and this has caused international companies, which come here looking for profit, to lose money. Shell has decided to sell but not just at any price and is mindful of the partner," sources on the oil market say.
According to the latest news on the market, the deal should include both the 58 gas station network and the other components of Shell Romania SRL, such as the lubricant operations, for instance.
Looking at the domestic retail market, out of the other six corporate players (Russia's Lukoil, Austria's OMV, Hungary's MOL, Rompetrol, Italy's Agip or Petrom), only Petrom and Agip are out of the question as potential buyers.
The fuel retail network in Romania comprises 1,800 - 2,100 stations, according to the estimates of the players on the market, in the absence of official statistics on this segment. If considering an average of more than 2,000 stations, Petrom has a 600 gas station network, Lukoil and Rompetrol have over 220 stations each, MOL has over 74, Shell has 58, OMV holds more than 51 stations, Agip has 20 stations, while the rest are held by private operators.
Shell logged profit in 2003 for the first time in five years. Its profit reached $5 million while the overall turnover was of $220 million. Shell operates through Shell Romania SRL on the fuel retail market, but also holds 55% in a joint venture, Shell Gas Romania, with SNP Petrom as the other shareholder.
The Anglo-Dutch company has invested more than $161 million in the two companies in Romania from 1992 onwards. Furthermore, Shell spent another approximately $70 million on exploration operations in northern Transilvania in mid '90s. The Romanian market has therefore cost Shell's local operations over $230 million in twelve years, of which too little was recovered.
Shell Romania SRL posted losses for years on end: from $13.2 million at a $145 million turnover in 1999 going through a $2.8 million loss at a $123 million turnover in 2000 to $3.8 million at a $88.9 million turnover in 2001. Shell Romania came close to a breakeven in 2001 when losses were worth only $100,000.
Worldwide Shell revenues exceeded $179bn at the end of 2002, and the company was employing more than 145,000 people in 145 countries.
adrian.mirsanu@zf.ro
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