DOWNSTREAM DEALS FORGED IN E. EUROPE

Downstream deals are cropping up in eastern Europe with western companies. British Petroleum Co. plc, Royal Dutch/Shell Group, and Total Cie. Francaise des Petroles have disclosed new developments in the region. BP Chairman Robert Horton opened the company's first service station in the Hungarian capital, Budapest. BP plans to have four more outlets operational by the end of the year. The company declined to comment on plans for further investment in gasoline marketing.

May 27, 1991

2 min read

Downstream deals are cropping up in eastern Europe with western companies.

British Petroleum Co. plc, Royal Dutch/Shell Group, and Total Cie. Francaise des Petroles have disclosed new developments in the region.

BP Chairman Robert Horton opened the company's first service station in the Hungarian capital, Budapest. BP plans to have four more outlets operational by the end of the year. The company declined to comment on plans for further investment in gasoline marketing.

The opening ceremony followed the signing of a processing agreement with the Danube oil refinery, Hungary's largest refining unit, and launching of a lubricants marketing venture.

The 140,000 b/d refinery will process 2.19 million bbl of crude for BP this year. The oil will be delivered either by pipeline from the Adriatic or through the Soviet Friendship II pipeline.

Products will be marketed by BP Oil Hungary, a joint venture founded in 1990 by BP 75% and Mineralimpex and Mineralkontor of Hungary. Some of the products will supply BP outlets in Austria.

Total formed a 50-50 venture with trader Marc Rich to deliver petroleum products to eastern Europe or produce them in existing refineries in the region. During the next 5 years the joint venture will spend 1.8 billion francs ($310 million) to acquire refineries in the region or update processing units belonging to other refiners. Payment will be taken in oil products.

Initial target markets are the Soviet Union, Bulgaria, and Romania where Marc Rich already has an option to purchase 50% of the Petromedia refinery.

Royal Dutch/Shell set up a subsidiary in Czechoslovakia as the first step toward developing a network of service stations in the country. It also will become involved in distribution and sale of Shell lubricants. Future activities could include crude oil supply and refining, as well as chemicals manufacture.