Conoco will not use its option to buy Unipetrol’s 51% stake in Ceska rafinerska

Conoco announced last evening that it will not use its option to buy Unipetrol’s 51% stake in Ceska rafinerska (Unipetrol’s largest subsidiary). Conoco is a member of an IOC consortium that holds a 49% equity stake in Ceska rafinerska; the other members of the consortium (Royal Dutch Shell, Agip) have not yet expressed their intentions. Conoco said that unsettled supply contracts between Ceska rafinerska and other Unipetrol subsidiaries influenced its decision, though it is interested in possibly purchasing the majority stake after the contentious supply terms are resolved (the Czech HN daily reported that Conoco is negotiating with MOL and OMV about forming a consortium to buy the 51% stake).

Unipetrol privatization could thus become complicated, since the sale of Ceska rafinerska is one of the strong assumptions behind Agrofert’s (the privatization tender winner) privatization strategy. The market could perceive the new situation as further supporting the speculation that Agrofert would pull out of the privatization; the stock could therefore react positively. Nevertheless, we believe there is still plenty of room for negotiation, and we think it is likely that (i) Ceska rafinerska (and probably also Benzina, the fuel retailer) will eventually be sold to Conoco (or a consortium including Conoco), and (ii) Unipetrol’s sale to Agrofert will be successfully completed. Separately, today is the record date for Unipetrol’s June 13 AGM.

Unipetrol announced that it would release its 2001 consolidated IAS results on Wednesday, June 12.

(Jiri Soustruznik)