FINLAND PLANS TO SELL INTEREST IN NESTE OY

Finland's national oil company, Neste Oy, will become the country's first state enterprise to undergo privatization. The Finnish government approved plans to sell a 1520% interest in the company, which is organized in five division: downstream oil, chemicals, gas, shipping, and exploration/production. The sale, which probably will take place next spring is expected to raise $292-487 million (U.S.). Neste has disclosed two foreign expansions.

Sept. 23, 1991

2 min read

Finland's national oil company, Neste Oy, will become the country's first state enterprise to undergo privatization.

The Finnish government approved plans to sell a 1520% interest in the company, which is organized in five division: downstream oil, chemicals, gas, shipping, and exploration/production.

The sale, which probably will take place next spring is expected to raise $292-487 million (U.S.).

Neste has disclosed two foreign expansions.

It has bid for the 70.3% of U.K. independent Sovereign Oil & Gas plc that it does not already own and established a joint venture in Estonia with a local company to build and operate an oil terminal.

The bid for Sovereign values the company at $146 million. It is likely to come under close scrutiny by the British government, which dislikes private sector companies being acquired by foreign state companies.

Industry sources say the Neste offer for Sovereign is unlikely to run afoul of U.K. government intervention. Sovereign's board recommends acceptance of the offer.

Sovereign is operator for the much delayed Emerald field in the U.K. North Sea. It also holds exploration acreage in the North Sea, Italy, and Tunisia.

In Estonia, Neste will build a $50 million product terminal at Tallinn Harbor with Eesti Kutus. Neste will own a 55% interest.

Work on the terminal is expected to begin next spring. It will have an 80,000 metric ton capacity.