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RPT-INTERVIEW-Czechs to seek stake in oil refiner -minister
January 22, 2013 / 5:12 PM / 5 years ago

RPT-INTERVIEW-Czechs to seek stake in oil refiner -minister

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* Czech government looks at taking control of oil sector

* Looking at stake in Ceska Rafinerska

* Minister says has indications some shareholders may sell

* Government looks at combining crude and oil product pipelines and refineries

By Jan Lopatka and Robert Muller

PRAGUE, Jan 22 (Reuters) - The Czech government is preparing a plan to take a stake in the country’s struggling foreign-owned oil refiner to bolster the central European nation’s energy security, Industry Minister Martin Kuba said in an interview.

The government has formed an expert group that will propose how to combine the two state-held crude and oil products pipeline operators with the country’s refiner, Ceska Rafinerska, he said.

Securing control over energy supplies has been a sensitive issue in central Europe, which is largely dependent on Russia for gas and crude and has experienced cuts in supplies in the past.

Kuba said the government’s aim would be to get majority control of a company that would integrate everything from crude supplies to oil products, and he criticised some past management decisions at the refiner.

“It is a strategic interest of the Czech Republic to return to ... playing an important role in the central European region and having decisive participation on what is happening in the Czech petrochemical industry,” Kuba said.

He also expressed concerns about the refiner’s future prospects. Europe’s refining industry has been suffering from overcapacity, and the firm’s majority owner has posted repeated losses.

Rafinerska is majority owned by Unipetrol, which is in turn controlled by Poland’s PKN Orlen. Royal Dutch Shell and Italy’s ENI are also shareholders.

The owners of the firm deliver their own crude for processing at its two refineries, the 55,000 barrel-per-day (bpd) Kralupy and 120,000 bdp Litvinov, both north of Prague.

The government should make a decision on how to proceed before the end of the first quarter, Kuba said.

Kuba refused to discuss details of how the plan might work and whether it could involve the purchase of shares in Rafinerska or some form of swap between Rafinerska’s owners and state-owned crude pipeline firm Mero and oil products pipeline operator Cepro.

Late last year, Mero bought a 5 percent stake in the TAL pipeline, which brings crude from the Mediterranean to Germany. The TAL links up to Mero’s IKL pipeline, and the purchase of the stake has given the Czechs better access to TAL’s capacity.

Kuba said the state wanted to change a situation in which it has control of the pipelines going into and out of the refineries but not the plants themselves.

“If we want to bring the segment together, we have to go back and seek a stake in Ceska Rafinerska,” he said.

He also criticised PKN for a situation last October in which TAL shareholders needed to use the pipeline’s full capacity, which caused an interruption of supplies to the Czech Republic.

“It was shown clearly that PKN does not have all issues contractually covered,” he said.

When asked whether there was willingness on the part of some shareholders to sell, he said: “Let’s say we have indications.”

Last week, Unipetrol said it would report a 4.5 billion crown ($235.64 million) operating loss for the last quarter of 2012 due to impairment charges on its physical assets, mainly at the refining unit Ceska Rafinerska.

Unipetrol is a successor to Czech oil processing firms partially privatised in the 1990s. PKN bought a 63 percent stake in it 13.1 billion crowns in 2004, valuing the company at 20.8 billion crowns. Its market capitalisation now is about $1.6 billion. ($1 = 19.2339 Czech crowns) (Editing by Michael Kahn and Jane Baird)

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