Statoil buys stations from competitor

TALLINN - By acquiring gas stations from its competitors, Statoil is planning to become the leading fuel supplier in the Baltics and Poland.

The Norwegian fuel concern bought 24 filling stations Dec. 18 from Alexela Oil Juhan, the second largest fuel retailer in Estonia and the leading retailer based on Estonian capital.

"Statoil has planned to expand. One of the fastest ways to do this is by purchasing the stations of the competitors," said Epp Kivaed, Statoil's managing director in Estonia. "We were interested in increasing our representation in Estonia. Statoil's objective is to become the market leader in the Baltics."

Before it acquired Alexela Oils' stations, Statoil owned 14 stations and held 10 percent of the Estonian fuel market. The new acquisition will make it the market leader with its 38 gas stations all over Estonia and will increase its market stake to 22 percent or 23 percent.

According to a press release issued by the two fuel retailers, both parties are satisfied with the agreement although Alexela will now have only 18 gas stations.

Juhan Kolk, board chairman of Alexela Oil, said the company had to sell the stations due to the low price of fuel on world markets. The company had also been thinking of a strategic investor but decided to sell part of its stations and continue as a strong and well capitalized company, he said.

The money received from the sale of stations will be used for further investments, and the media has been speculating that Alexela has been having financial difficulties.

Shell now holds the leading market position. It purchased EK's chain of gas stations and brought its market share to about 18-20 percent.

Neste is the third largest in the market, with 10 percent of the market. Neste has about 24 filling stations in Estonia, 14 of which are based in Tallinn. The concern's objective is to keep the present market share.

Hydro Texaco has only six filling stations in Estonia but plans to win 15 percent of the market in the next five years.

"Hydro Texaco, a leading fuel retailer in Europe, does not intend to sit idly by and watch Shell and Statoil divide the market here," Andres Kivistik, board member of Texaco's Estonian division, told the daily Postimees. "Our aim is to be among the four leading retailers in the Baltic States in the future," said Kivistik.

Statoil Estonia's turnover in 1997 was about 476 million kroons ($36 million) and the predicted turnover for 1998 is 600 million kroons. The firm lost about 20 million kroons in 1997. Alexela made a 1.3 million kroon profit on a 374 million kroon turnover in 1997.