The battle for Lukoil Romania: americans, MOL and greeks fight for russian strategic assets

The takeover of Lukoil's assets in Romania has become the epicenter of unprecedented pressure, in which American sanctions, the interest of international investors, the balance of the domestic market and the responsibility of the government intersect at a decisive moment for the country's energy security. While November 21 - the deadline for the entry into force of the sanctions imposed by the US authorities, from which any transaction with the Russian conglomerate becomes prohibited - is fast approaching, Lukoil has requested a postponement from the United States Treasury, aware that the massive portfolio it holds in Romania and other Eastern European states cannot be left to drift. In our country, we are talking about the Petrotel Ploieşti refinery, a network of over 300 gas stations, a wholesale business for automotive oils, a gas trader and almost 88% of the rights to an offshore concession in the Black Sea, a strategic asset for the country's energy future.

According to government sources, the fight to take over these crucial assets is between three powerful companies: MOL, which already operates a chain of 230 gas stations in Romania, Carlyle, the American giant that through Black Sea Oil and Gas extracts gas from the Black Sea, and Hellenic Petroleum, an important company at a regional level, but without a presence on the Romanian market. And the interest is not limited to gas stations, because while some companies are targeting exclusively the distribution network, others only the Petrotel refinery, and some are interested in the entire package.

In this context, the Minister of Energy, Bogdan-Gruia Ivan, puts his finger on the wound and firmly rejects any justification for price increases, while the markets try to take advantage of the uncertainty.

"At the moment, no objective increase in fuel prices is justified given that Romania already has enough fuel, given that the refinery anyway has unused production capacity... Romania today exports diesel and gasoline to neighboring states,” said Bogdan Ivan, at the conference "Evolution of competition in key sectors under the impact of the energy transition and digitalization”, an event organized by the Competition Council.

The Minister of Energy stated that the Government is working intensively on legislation that would transpose international sanctions and, at the same time, protect the economy, distribution chains and all commercial partners of companies under restrictions.

Bogdan Ivan stated: "We are working to limit the negative effect on suppliers, distributors and all economic agents. There is a strategic working group, coordinated by Deputy Prime Minister Cătălin Predoiu and including the Ministries of Energy, Economy, Foreign Affairs and Finance, which will finalize a regulatory act in accordance with global, European and national legislation. The document is already in draft form and is to be adopted in the next government meeting, next week, after another round of technical consultations with OFAC experts from the US to avoid any negative effect on employees and commercial partners".

We recall that, amid these negotiations, the President of Romania, Nicuşor Dan, confirmed last Thursday that the Romanian state could temporarily take over the Petrotel refinery to maintain its operation and prevent disruptions in the market, a measure of last resort in the face of an unprecedented scenario.

The Competition Council is closely monitoring the situation, and the institution's president, Bogdan Chiriţoiu, stated that the state is ready to act in coordination with the other countries affected by the sanctions and to keep Lukoil's economic operations functional until the transaction is completed:

"I am convinced that the Romanian state will take measures. We will all try to ensure the functioning of these economic operations so that there is as little disruption in the market as possible," said the president of the Competition Council, who also said that, depending on how the asset packages are structured, the transaction may be approved at the national or European level. If it is a question of taking over assets at the national level, the offers of companies wishing to take over Lukoil's activity in our country will be analyzed by the Foreign Direct Investment Examination Commission. Bogdan Chiriţoiu concluded by saying that, for the moment, however, there is no official notification regarding the takeover of Lukoil, which shows that the discussions are still in a stage of accommodation and positioning.