Slovnaft, Slovakia's sole oil refiner, signed an agreement last May with the Dutch company Shell to buy a network of 57 Petra gas stations from the Czech chemical company Chemapol Group. The temporary union, which along with three other multinational petrol companies passed the last round of a tender, was initiated by Shell and if successful, will push Slovnaft forward in its goal to become a regional market player.
"Slovnaft was the most willing partner from all participants who accepted our demands and we reached the agreement in the easiest possible way," said Pavel Šenych, Network Project Manager at Shell Czech Republic.
Jan Kerbach, head of the Strategies and Projects division at Chemapol, saw the alliance between Slovnaft and Shell as a temporary one, but did not exclude the possibility of their future cooperation. "Maybe they are planning some other joint project, but so far I don't have any detailed information that might indicate stronger ties between the two companies," he noted.
However, Šenych rejected Kerbach's guess and stressed that the sole goal of the alliance was to win the tender. "In case we win, we will divide the chain and keep a competitive environment," he said. Šenych refused to reveal the ratio of division after the possible tender success, citing an information embargo signed by all parties involved in the tender. Slovnaft officials declined to be interviewed for this story, also citing the information embargo.
However, Šenych did hint at the ratio while explaining Shell's reasons for entering the tender. Šenych said that the Petra gas station chain collided with Shell's chain, because in quite a few places both companies would have their stations at the same spot or very close to each other. When asked about the number of such cases, he said, "I cannot tell you that number, because we would get to the question of ratio."
Kerbach spoke of a maximum of 15 Petra stations that are located near Shell stations, totalling 26% of Petra's gas station network.
Guessing a favorite
Chemapol, which decided to sell the gas station chain to pursue a strategy more geared toward the chemical industry, declined to circle any candidate for winning the tender, but Kerbach did indicate a preference from the four groups, which, apart from the Slovnaft-Shell alliance, include the Austrian ÖMV, French Elf and German DEA.
"I do not dare to make any predictions, but according to initial indications and uncommitted offers, DEA seemed to be the most promising," Kerbach said.
Šenych for his part assessed Slovnaft-Shell's chances very diplomatically. "We have a 25% chance, since we have three competitors and everyone has the same chance," he said. But Kerbach countered: "Slovnaft & Shell did not have any ace in the sleeve," he said, insisting that the one who actually offered more than the others was DEA.
"The main criterion for choosing the winner will be price, of course," explained Kerbach, but added that "Chemapol does not want to get rid of the gas station chain at any cost."
In its May 27 issue, the Slovak business weekly Trend published that the Petra chain is worth about 2.5 billion Czech crowns ($73.5 million). Kerbach said that such a price would satisfy Chemapol.
The final decision should be announced by the end of June and beginning of July, which was confirmed by Chemapol.
Slovnaft currently provides 17% of all fuel supplies on the Czech market, but so far it hasn't been able to get a foothold on the fuel retail market. If the Slovnaft-Shell alliance succeeded in the tender, Slovnaft would increase the number of its gas stations in the Czech Republic from the current 30 to about 45. Shell, which now owns 58 stations would reach about 100. There are 1,600 petrol stations in the Czech Republic.
Pointing out Slovnaft's plans to build a chain of 18 new gas stations in southern Poland, Martin Kabát, an analyst with the brokerage company Slávia Capital, said that Slovnaft is becoming a strong regional player. "From a global perspective, Slovnaft is a small company, but from a regional one, it fulfills its role," he said "By creating a few stations abroad every year, Slovnaft consequently grows into a regionally respected company."