ECONOMY

Motor Oil denies deal rumors

Greek refiner Motor Oil and Russian oil giant Lukoil said they had not agreed on a deal for Lukoil to buy a stake in Motor Oil, causing Motor Oil shares to lose earlier gains and end lower yesterday. «Following a briefing by the company’s major shareholder, there is no deal on the participation of Russia’s Lukoil in Motor Oil’s share capital,» the refiner said in a stock-market filing. It did not elaborate. Earlier yesterday, the company confirmed it was talking to Lukoil about possible cooperation, after media reports said the Russian oil giant was close to buying a stake in the Greek company. Lukoil said media reports saying it had struck a deal to buy refining assets in Greece were false. «Lukoil officially declares that such information is incorrect and misleads the participants of the financial market,» Lukoil said in a statement. Greek media reported that Motor Oil, which is controlled by the Vardinoyiannis family, was in advanced talks to sell a 10 to 20 percent stake to Lukoil for about 500 million euros ($642.2 million). Motor Oil is Greece’s second-largest refiner after Hellenic Petroleum. A further indication that talks were afoot was provided by the fact that Lukoil CEO Vagit Alekperov, who had been part of a business delegation accompanying Russian President Vladimir Putin on his visit to Athens, stayed behind and did not follow the delegation to its next stop, Egypt. The company’s first statement followed a warning from the Athens bourse that it would suspend Motor Oil’s shares unless the firm responded to the rumors, which traders said drove its stock 5 percent higher on Tuesday. «Motor Oil announces that talks on a possible cooperation with other firms in the oil refinery and energy sector… are taking place and are within the context of the company’s broader business strategy,» the Greek refiner said in its stock-market filing. «This also applies to press reports of a cooperation with Lukoil,» it said. Analysts said an agreement between Russia, Greece and Bulgaria earlier in the week to end years of disputes and launch a long-delayed oil pipeline that will link the Black Sea to the Aegean played a role. «I think an agreement was facilitated following the visit of Russian President Vladimir Putin to Athens and the decision to move forward with the Burgas-Alexandroupolis oil pipeline project,» said analyst Elias Lazaris at Artion Securities. «Both sides saw that the political will for the cheaper and easier transport of oil exists,» he said. He said a deal with Lukoil as a strategic partner made sense as the Greek refiner needs to secure oil supplies. «It no longer has that after ending its partnership with Saudi Aramco,» Lazaris said. The Vardinoyiannis family bought Aramco’s 16.4 percent stake in Motor Oil in September 2005. «It’s a positive development for Motor Oil, being in talks with Lukoil,» said fund manager Vassilis Antoniadis at Marfin Funds. The ASE decided to allow trading to continue after the refiner’s response. Its shares ended down 2.07 percent at 21.80 euros. (Reuters/Kathimerini)