Talks on new retail deal

June 2, 1999, 17:00 CEST

Plans to collaborate over service stations in eastern Europe are being pursued by Statoil and Finnish energy company Fortum.

The Statoil marketing international unit in Retailing & Nordic Energy and Fortum have signed a letter of intent to pursue negotiations on creating a joint company for their retail outlets in Poland, the Baltic states and Russia.

This partnership will also embrace distribution and supply in these five countries.

Statoil and Fortum plan to conclude a deal in the late summer or autumn on joint ownership and development of the new company.

Between them, they will have the expertise and financial strength to implement a long-term and aggressive commitment to retailing and supply in eastern Europe.

Both companies are currently represented in all the countries covered by the planned collaboration.

Statoil has 90 forecourts in Poland, 33 in Estonia, 31 in Latvia, 28 in Lithuania and two in the Russian city of Murmansk.

Fortum, which embraces power utility Imatran Voima and the Neste oil/energy group, owns 17 stations under the Neste banner in Poland, 25 in Estonia, 24 in Latvia, 10 in Lithuania and 22 in Russia.

While Statoil operates roughly 2,000 service stations in nine countries, the Finnish company has roughly 1,100 in eight nations.

"A condition for joining forces with one of our competitors in these markets is that this provides a sound basis for continued development of our operations in a better way than we could achieve alone," says Poul Luxhøj, vice president for Statoil marketing international.

"Through a joint company of this nature, we can strengthen our position as an attractive employer and solid supplier of products and services to our markets."

Development and operation of Statoil's service stations in Scandinavia will not be affected by a possible collaboration with Fortum in eastern Europe. The Scandinavian forecourts are now being operated through a company owned 50-50 with ICA.