Statoil to exit Irish petrol market in €250m sell-off
Wednesday February 01 2006
Weston
NORWEGIAN oil company Statoil has appointed Merrill Lynch to sell its oil business in Ireland in a move that could generate as much as €250m for the company.
The group supplies petrol to 236 forecourts in Ireland and directly owns 70 of these. It is also involved in commercial oil supply and owns terminals and heating oil distribution businesses here, employing 1,100 staff.
On Monday Statoil sold its 30pc stake in a Dublin electricity station for an estimated €75m. Last year Shell exited the Irish market, selling its 55 filling stations and 35 distribution depots for a figure thought to be €180m to Topaz Energy, a buyout group backed by Ion Equity.
Statoil's senior vice-president of retail in Europe Jacob Schram said yesterday the firm intends to accelerate its strategic commitment to its markets in Scandinavia and eastern Europe.
"Whilst we have a solid position in Ireland, we believe that, under new ownership, the organisation there will be better placed to achieve its strategic potential."
Statoil's stated position is that it "aims to streamline further the group's business activities."
Statoil has a share in the Irish petrol retail market of about 20pc.
The last filed accounts for Statoil Ireland show that it had a turnover of just under €1bn in the period to December 31 2004, up from €815m in the previous year.
Higher costs and a exceptional charge of €6.4m meant that pre-tax profits crashed from €17.7m in 2003 to a loss of €2.8m in 2004.
Competitive
The after-tax loss for the financial year amounted to €3.44m. This loss meant profits carried forward at the end of the year dropped from €28m in 2003 to €21.8m in 2004.
Statoil's decision to exit Ireland is seen as a reaction to competition in a market which has become intensely competitive in the past number of years.
Tesco's entry into the retail petrol market has put particular pressure on the profits of the major oil companies.
Sources added last night that Statoil was anxious to capitalise on booming property prices by putting its forecourts and other assets up for sale now.
Statoil wants to sell the business as a unit rather than dispose of it in separate divisions.
Management of the Irish business, led by Tony Murray, has been precluded from bidding for the business. Statoil, which is a public company in Norway, is still 40pc owned by the Norwegian government, and is anxious to avoid any claims of insiders having an advantage.
The Irish management team was responsible for the Fareplay forecourt convenience brand, which has now being adopted by Statoil internationally.
