ECONOMY

Hellenic Petroleum to expand into Mideast

NICOSIA (Reuters) – Hellenic Petroleum plans to use its acquisition of BP’s inland and retail fuel businesses on Cyprus as a springboard for further expansion in the Middle East, executives said yesterday. The management team of BP Cyprus would be transferred to the new venture, which was expected to secure local regulatory approval without any hurdles. «We are interested in the region, we have clients in Lebanon and we would want to serve them through the base we have in Cyprus. It would be used as a launchpad to better serve our clients,» said Hellenic Petroleum Managing Director Athanasios Karahalios. Hellenic Petroleum, Greece’s largest refiner, has been expanding aggressively into the Balkans in recent years, and last week signed a deal to buy 54.35 percent in Montenegrin oil firm Jugopetrol Kotor for 65 million euros. It did not disclose terms of the BP deal. The Greek State, which owns Hellenic Petroleum, is trying to sell a 23.17 percent stake in the refiner and is now negotiating jointly with Lukoil and the Latsis Group, which owns Hellenic’s local rival Petrola. Hellenic Petroleum Chairman Giorgios Moraitis denied suggestions that the slow-moving negotiations had hit the rocks. «We would want cooperation with other companies… that cooperation would be restricted to the adoption of a business venture plan for the wider Balkans area and possibly elsewhere. The Greek government never discussed relinquishing management to another investor,» he said. «Negotiations are ongoing, they have not concluded yet,» he added. Cyprus’s energy market is now a relatively closed one, with one state-controlled refinery, and prices that are set by decree from the Commerce Ministry. There is also one electricity provider, the Electricity Authority of Cyprus. Those restrictions are likely to be eased when Cyprus joins the European Union, expected in 2004. «It would be natural for us to keep an eye open to utilize any opportunities which may arise,» said Moraitis.