Lukoil plans to expand its retailing and refining assets in CEE region, the vice president Leonid Fedun, said at a presentation of the company's bond issues. Fedun also said that Lukoil would be negotiating an option to buy shares in a Ceska Rafinerska. Unipetrol owns 51% of Ceska rafinerska (CeRa). The refinery's other shareholders - a consortium of Shell, Eni and ConocoPhillips with 49% - held an option to buy Unipetrol's shares but did not exercise this. ConocoPhillips said it intended to sell its stake in the refinery and Lukoil has been named as one of the leading candidates to acquire the asset. Lukoil also plans to buy 376 filling stations in Europe from shareholder ConocoPhillips to enter Belgian, Czech and Slovak markets and grow in Poland, Hungary and Finland
Our view: Lukoil seems to be persistent in accessing the refinery and retails stakes in CEE. Thought there is a possibility for Lukoil to acquire the 16% stake of Ceska Rfinerska from ConocoPhillips, we think it will be quite hard to get the majority due to the dispersed ownership structure of the company and preemptive rights of the major shareholders. The acquisition of the filling stations from ConocoPhillips will have a long term affect on the CEE retail market as by building the Green field stations and buying the Jet stations from ConocoPhillips, Lukoil will become the important regional player and will contribute to the market consolidation thus pulling up the retail margins in the future.