Neste, Statoil chains not to merge in Baltics

  • 1999-11-25
TALLINN(BNS) - Finland's Fortum and Norway's Statoil have decided to discontinue plans to merge the Neste and Statoil service stations' chains in the Baltic countries, Statoil said on Nov. 18.

Statoil reported that talks for transfer of the two companies' service station operations in Russia, the Baltic states and Poland to a joint venture company have been discontinued.

"Following six months of negotiations, both parties have concluded that insufficient preconditions and synergies have been achieved for a co-operation of this scope," Statoil said.

"Instead, the two companies have decided to continue discussions with the aim of enhancing the joint operation of their logistical systems," Statoil said.

Kai Lauren, Vice President of Fortum Oil and Gas, which uses the Neste trade mark, stated that the two companies' development strategies differed too much from each other and so the idea of an intended joint venture with Statoil was never carried out.

"Statoil's plan was to continue development of the traditional service stations network while we want to focus on the building of unmanned service stations," Lauren said.

"It appeared in the course of talks that unification of the two strategies would not benefit us so much in economic terms as we had thought it would. So it was logical for both the parties to continue separately, each with its own strategy," he said.

Fortum currently has 115 unmanned and manned service stations in the Baltic countries, Russia and Poland, and it is planning to bring the number of its unmanned stations up to 200 in the region in the next few years.

Lauren said that according to Fortum's development strategy some of the manned service stations will be turned into unmanned ones while some will apparently be sold.

According to information earlier published by Finland's Kauppalehti, the main source of differences between the groups was the Finns' demand that Neste-branded lubricants be sold also in Statoil service stations.

"This was none of the causes, the issue wasn't even touched upon during the talks," Lauren said.

Statoil and Fortum announced in June their plans for uniting their operations in the Baltic countries, Poland and Russia.

According to the plans, unmanned fuel outlets of a joint venture of the two groups were to start operating under the Neste and manned fuel outlets under the Statoil brand name.

Under a preliminary agreement, the two groups planned to join their operations in the area on Jan 1.