ECONOMY

Hellenic Petroleum in Montenegro

Oil refiner Hellenic Petroleum yesterday signed an agreement with the government of Montenegro for the acquisition of a majority stake in Montenegrin oil company Yugopetrol for 65 million euros. The Greek company is also committed to investing 35 million euros over the period 2003-2007 to modernize Yugopetrol and expand its operations into neighboring Bosnia and Kosovo. The Yugopetrol acquisition is set to further enhance Hellenic Petroleum’s presence in the Balkans. It owns a petroleum marketing company in Bulgaria and is poised to launch a similar venture in Yugoslavia. It also operates the OKTA oil refinery in FYROM and a petrol station chain in Albania. Together with Austrian oil company OMV, Hellenic Petroleum has concessions to explore and exploit hydrocarbons in three land blocks in Albania. Hellenic Petroleum acquired the 54.35-percent stake in Yugopetrol after outbidding rivals such as Russian oil giant Lukoil, OMV and Croatia’s INA. It has promised not to cut any job from Yugopetrol’s work force of 460 in the next five years. Yugopetrol imports and distributes petroleum products via a network of 56 petrol stations in Montenegro. It also exports to Bosnia, Serbia and Kosovo. It has upstream activities in Montenegro in collaboration with UK companies Star Petroleum and Ramco Energy. It has storage facilities at ports and airports in Montenegro. Yugopetrol sells some 500,000 tons of petroleum annually, generating revenues of 200 million euros yearly. Last year, it posted earnings before interest, tax, depreciation and amortization of 16.8 million euros and after-tax profits of 10.6 million euros. The Greek government in May accepted a joint bid from the Latsis group and Lukoil for a 23.17-percent stake in Hellenic Petroleum. Latsis owns the Petrola oil refinery and is believed to want to merge the venture with Hellenic Petroleum. The government is hoping that a linkup with Lukoil will enable the Greek oil refiner to play a leading role in the neighboring Balkans and expand into the Caspian region. Hellenic Petroleum has signed up with Belgium’s Tractebel and Greek construction company Aegek to construct a 390 MW power generating plant in Thessaloniki, expected to be completed in 2004.