x Abu Dhabi, UAESaturday 20 January 2018

OMV in Turkey expansion plan

The Austrian petroleum group OMV plans to build an integrated energy business in Turkey after its takeover of Petrol Ofisi, the country's biggest and most visible petrol retailer.

The Austrian petroleum group OMV plans to build an integrated energy business in Turkey after its takeover of Petrol Ofisi, the country's biggest and most visible petrol retailer.

The company that owns Turkey's only nationwide chain of petrol stations could also become involved in businesses including power generation and oil and gas exploration. Its portfolio could even include Turkish wind farms.

"We see Petrol Ofisi as a company that also in future could include gas and power," Wolfgang Ruttenstorfer, the chief executive of OMV, said on Monday.

OMV, which is 20 per cent owned by Abu Dhabi's International Petroleum Investment Company, is already building a gas-fired power plant near Samsun, a Turkish Black Sea port. That and additional power projects could in time be assimilated by Petrol Ofisi.

"We don't exclude a plan to build a further power plant in Turkey. We are considering another gas-fired plant but we do not exclude a wind project," Mr Ruttenstorfer said.

Such projects would "complement" Petrol Ofisi's existing activities, he added.

While OMV's gas and power division has largely focused on building large, modern gas-fired power plants and supplying them with fuel, it has recently taken its first step into the renewable energy sector. It is building a wind park at Dorobantu in Romania, which is scheduled to be in service next year.

Romania, where OMV also operates oil refineries, is the company's second energy hub after Austria. It plans to develop Turkey into a third hub for its expanding international energy interests. Those include the Nabucco gas pipeline project, in which OMV is a partner.

Nabucco, if built, will deliver up to 31 billion cubic metres a year of central Asian and Middle East gas to Europe through Turkey, bypassing Russia.

But many analysts have questioned whether the project will be able to obtain the necessary supplies.

Negotiations to secure Azeri gas for Nabucco were "on track", Mr Ruttenstorfer said.

He also stressed the strategic importance of Turkey's proximity to Iraq, where OMV is participating in the development of gas fields in the country's north-eastern Kurdistan region in a consortium with the Sharjah affiliates Crescent Petroleum and Dana Gas, and the Hungarian petroleum group MOL.

Kurdish gas exports, however, have been delayed by a protracted dispute between the regional government and Baghdad.

That is one reason OMV is stepping up its regional oil and gas development efforts.

"We are definitely interested in finding and developing gas reserves around Turkey," Mr Ruttenstorfer said.

Petrol Ofisi has a 26.75 per cent stake in Turkey's largest gas production project, in the Black Sea, but output from the project declined last year.

Mr Ruttenstorfer said OMV and Petrol Ofisi might seek further gas development opportunities in Turkey. So far, the potential had turned out to be "limited", he added.

Of Petrol Ofisi's existing strengths - most notably its petroleum distribution and marketing network - Mr Ruttenstorfer said OMV would do everything possible to bolster the Petrol Ofisi brand within Turkey where it is widely recognised.

"We have no intention to change the brand," he said. "It is well known in Turkey. It's an excellent brand and we will do everything we can to strengthen the brand."

Similarly, OMV has no plan to de-list Petrol Ofisi from the Istanbul Stock Exchange, even though it has a regulatory obligation to offer to purchase the 4.25 per cent of Petrol Ofisi's shares owned by minority shareholders.

"We find it quite attractive for Petrol Ofisi to continue to be quoted on the Istanbul exchange," Mr Ruttenstorfer said.

In Istanbul on Monday, Petrol Ofisi's share price rose 7.4 per cent to 7.25 Turkish lira.