Spain's petroleum marketing sector continues to restructure.
Partly state owned Repsol SA and Royal Dutch/Shell Group are discussing supplying each other's retail outlets in the U.K. and Spain.
And Portugal's state owned Petroleos de Portugal (Petrogal), seeking to sharply expand retail operations in Spain, complains of government interference with foreign investment in Spanish marketing.
Meantime, Conoco Inc. has agreed with Saras SpA Raffinerie Sarde, Milan, to set up a network of service stations in northern Spain and Portugal at a cost of 100 billion pesetas ($972 million). The two are considering building an oil terminal at the port city of Gijon in Asturias, Spain, and said Exxon Corp., Total, and Shell are interested in participating in the project.
SHELL/REPSOL TALKS
Shell and Repsol ruled out the chance of exchanging interests in each other's refineries in any kind of strategic exchange.
Repsol has 500 service stations in Britain, about 2.5% of the market, and seeks a deal that would guarantee supplies there.
At the same time, Shell has not penetrated the Spanish market despite last year's end of the distribution monopoly held by state owned Cia. Arrendataria del Monopolio de Petroleos SA (Campsa).
Repsol controls about half of Spain's 4,000 service stations and might offer some of its stations there in an exchange with Shell.
Repsol won't say how much of its market it might cede to Shell. At the same time, it denied reports it might be preparing to sell its Petroleos del Norte SA (Petronor) affiliate, which it recently acquired. Petronor operates the 250,000 b/d Somorrostro refinery at Bilbao.
Last year, British Petroleum Co. plc acquired interests in Petroleos del Mediterraneo SA (Petromed), Madrid, with about 280 stations, and Ste. Nationale Elf Aquitaine took a stake in Cia. Espanola de Petroleos SA (Cepsa), Madrid, with about 1,000 stations.
Petromed also operates the 120,000 b/d Castellon de la Plana refinery. Cepsa operates a 130,000 b/d refinery at Tenerife, Canary Islands, a 160,000 b/d refinery at Gibraltar, and a 160,000 b/d refinery at Cadiz as well as participating in a wide range of upstream and downstream activities.
PETROGAL COMPLAINTS
Portugal's state owned Petrogal wants to jump its share of the Spanish market from 43 outlets and accuses the government of creating a "smokescreen" to block foreign entry into marketing there.
Petrogal plans to have 80 stations by yearend and will invest 30 billion pesetas ($291.6 million) the next 4 years to expand to 300 stations.
Francisco Naranjo, head of Petrogal's operations in Spain, said following Campsa's breakup the government still has not made clear terms under which foreign companies can operate in Spain. He also accused Madrid of dragging its feet in allowing foreign companies to buy or build service stations, citing bureaucratic red tape.
Naranjo said there are about 1,000 service stations not in the hands of the biggest companies. Officially, the government places that number at 400, but Naranjo contends there are another 600 stations holding supply contracts with the biggest companies that easily could be rescinded.
Further, Petrogal is considering an exchange of retail outlets with Repsol. Petrogal owns half of Portugal's 3,000 stations, and Naranjo said such near-monopolies were out of place in Europe. He cited U.S. retail gasoline marketing, in which the seven biggest marketers control less than 25% of the market.
Naranjo said Petrogal had not been able to reach a direct marketing agreement with Campsa because the Spanish supplier "demanded all or nothing" and wanted to supply all of Portugal's refined products demand. Petrogal since has chosen to purchase its products directly and transport them across the border itself.
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