Slovak-Hungarian refinery Slovnaft, pictured above, wants to get complete control of its sole supplier. "It's natural that refineries own operators which feed them with crude oil," the firm has said. photo: TASR |
The announcement also coincided with a statement from the government that it would sell its 49% stake in the firm as a whole package, confirming the fears of stock market dealers that they would not see any of the possibly lucrative shares floated on trading floors.
"We declared our interest in Transpetrol more than a year ago, when our financial results were much worse. Our improvement will help us generate more resources for this investment," said Slovnaft spokesman Ľubomír Žitňan.
Slovnaft had first made public its interest in Transpetrol at the end of March last year when Hungarian oil and gas firm MOL took a 36% share in the Bratislava refinery, creating a regional refining giant.
At that time it was fresh off a 1999 loss of 2.76 billion crowns. But after interest rates on foreign currencies fell, and after the firm began using new production technologies, Slovnaft returned to better financial health.
Žitňan said that Slovnaft could now offer both an investment with strong financial backing and a guarantee of Transpetrol's future growth.
"A foreign company should not own Transpetrol. Our interests in the firm make us the best shareholder for [the future of] Transpetrol," said Žitňan.
Slovnaft has been using Transpetrol as the source of its crude oil since 1962, and since the government announced its intention to sell its stake in spring last year, has made it clear that it would like to obtain complete control of its sole supplier.
Analysts believe that the government's decision to sell the stake as a whole has only further whetted the refiner's appetite.
"They [Slovnaft] wouldn't want to see the government dispersing a part of the stake on the capital markets. It would lower their influence in a very strong company," said Marek Jakoby, analyst at the Bratislava-based economic think tank MESA 10.
"The higher the stake, the better it is for us. It's natural that refineries own operators which feed them with crude oil. To get a whole 49% stake in Transpetrol is of crucial importance for us," Žitňan added.
Strong finance essential
Slovnaft is expected to face stiff competition for what analysts say is a lucrative company for oil sector investors.
At the end of last year, the government confirmed that Transpetrol was interested in participating in a new crude oil pipeline connecting the Ukrainian Black Sea port of Odessa with western Europe.
At that time, speculation grew that American firm Chevron would make a bid for Transpetrol to support its own plans to transport large volumes of crude from fields in the oil-rich central Asian state of Kazakhstan to western Europe.
Analysts now say that Slovnaft will need all the financial reserves it can muster to fight off any bid from the US oil giant and other potential investors such as Austria's OMV, which lost out last year to MOL in the race to buy 36% of the Bratislava refinery.
"If these companies decide to bid for the stake it will mean tough competition for Slovnaft. They'll really have to invest a lot of money," said Miloš Božek, analyst at J & T Securities.
