Hungarian refinery giant MOL is about to seal a deal with AGIP to buy the Italian’s firm 124 petrol stations in the Czech Republic, the Czech daily Hospodářské Noviny reported. If the deal goes through, MOL will become the second biggest player on the Czech market. It could also spark further consolidation.
Dubbed the deal of the year by the daily, the transaction is reportedly close to completion. MOL is set to acquire 124 petrol stations across the Czech Republic from AGIP, owned by the Rome-based multinational oil and gas company ENI. MOL international relations spokesman Tamas Berzi refused to confirm or deny the deal, according to the report which cited unnamed sources.
MOL already owns 125 Pap Oil petrol stations in the Czech Republic as well as 24 which belong to its subsidiary Slovnaft. The acquisition of the AGIP stations would make it the second biggest retailer after Benzina, a network owned indirectly by Poland’s PKN Orlen.
MOL declared that after taking over the Pap Oil petrol stations in 2012, its mid-term goal was to double its share of the Czech retail market from around 5 percent to 10 percent.
The daily also reported that part of the payment for the petrol stations will be the transfer of MOL-owned Mantova refinery to AGIP parent company ENI. The Mantova refinery specialises in the heavy crude oils, has a capacity of 2.6 million tonnes per annum, and had been reportedly threatened with closure by MOL.
AGIP has been considering selling its loss-making Czech operation for some time, the newspaper says. The firm is also said to be planning to sell its stake in Česká rafinérská, a refinery it co-owns with PKN Orlen. The Polish company meanwhile was also reportedly interested in acquiring AGIP’s Czech petrol stations.
Several other firms have exited the Czech market before AGIP including Aral, Esso, Jet as well as Pap Oil which sold its petrol stations to AGIP in 2012. With over 3,700 stations, analysts say the Czech network is too dense and the country’s strong illegal, or grey, market is eroding profits for above-board retailers.
Ivan Indráček, the head of SCS, an industry group, told Hospodářské noviny that he expected more firms to leave the Czech Republic, including Shell and OMV, the third and fifth biggest players on the market.
Changes to the petrol retail market are not likely to affect oil prices for end consumers, according to SCS, as a majority of petrol stations are owned by small independent firms. However, PKN Orlen’s efforts to acquire control of Čepro and Mero, Czech state-owned fuel distribution and petrol station firm and oil pipeline operator, respectively, could worsen conditions for independent petrol stations operators on the wholesale market.