Russian Lukoil takes a second look at buying Akpet
Posted by meb at April 22nd, 2008
Russia-based oil company Lukoil, which entered the Turkish market in 1998, has again taken an interest in acquiring Turkish gas distributor Akpet after its initial attempt failed last year.
Lukoil, which currently has around 50 stations mainly in minor cities and on the outskirts of major cities, aims to grow in the Turkish market by forming partnerships or purchasing domestic companies. According to sources in the energy field, Lukoil will hold preliminary negotiations with Akpet, a subsidiary of the Aytemiz Group. If the initial negotiations go well, Lukoil will then launch official negotiations to either buy out Akpet or to form a partnership with the company. Akpet currently operates 700 gas stations across the country.
Previously Akpet was under the control of both the Aytemiz and Ciner groups, of which each had a 50 percent stake. Last year Lukoil conducted acquisition negotiations with the Ciner Group for its shares in Akpet. However, Ciner could not come to an agreement with Lukoil and ended up selling its shares to Aytemiz and leaving the fuel sector. Lukoil also had talks with Bölünmez Petrolcülük’s Moil.
With oil prices hitting up to $117 a barrel in world markets, the petroleum industry has become one of the most profitable sectors and has also revived the Turkish domestic petroleum market.
Lukoil had started to search for merger and acquisition options after seeing a slowdown in business following some unsuccessful projects. If Lukoil does acquire Akpet, the company will become one of the leading gas distributors in Turkey.
Gulf companies also eyeing Turkish fuel
In addition to Russia, Gulf countries are also interested in the Turkish fuel market. According to energy professionals, another leading energy company operating in the Gulf also wants to enter the Turkish fuel market. The oil giant, which reportedly had talks with domestic companies including Akpet and others, will likely invest in Turkey to access the Turkish fuel market, which has an economic volume of around $50 billion. Moreover, it is expected that other major companies in Turkey operating in sectors other than energy also aim to enter the fuel business and reportedly have already launched negotiations.
The Aytemiz Group, which has been involved in the fuel business for more than 40 years, established the 50-50 percent joint venture with Ciner Group under the name of Akpet in July 2005. According to Energy Market Regulatory Agency (EPDK) data, Akpet is among the leading eight gas firms in the country. The company is currently sixth in terms of market share, third in terms of storage capacity and second in terms of number of stations among 46 major gas distributors.
Lukoil has seven oil refineries and produces 80 million tons of oil and 5 trillion cubic meters of natural gas annually. Outside of Russia, the company has investments in 24 countries, including Turkey, Holland, England, Hungary, the US, Singapore, Austria, Azerbaijan and Georgia. Operating since 1998, Lukoil wants to grow in the Turkish market due to its geopolitical importance and large domestic market. The company previously had plans to establish a refinery in Turkey but then decided to focus on distribution channels.
There had been mergers in the Turkish fuel market between Petrol Ofisi and OMW and between Shell and Turcas. Another ongoing merger possibility is Türkiye Petrolleri (TP) and Moil.
source: Today’s Zaman
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