Lukoil fuming over MOL-OMV alliance

Rompetrol is not considering any strategy to counter a possible OMV-MOL-Petrom economic alliance, but Russian Lukoil is looking into possible strategies, since the announcement two days ago by OMV that it has an 18.6 percent MOL share package, which it intends to raise.

Dan Ionescu, Rompetrol's Vice President, in charge of all supply and trading development operations, says the group will not strategize because the market is unlikely to change and competition already exists.

"We will continue to focus on our development strategy. In addition, considering globalization, there can be no talk of a domestic market, but rather a regional one," said Ionescu. He also appreciates that at the current fuel distribution level, it would be very hard for OMV, MOL and Petrom to develop an "action plan" in order to monopolize the Romanian oil market. Furthermore, the Rompetrol official indicated that if OMV were to become the owner of both Petrom and MOL, the Austrian group would not be able to dictate fuel prices.

"This economic alliance is of some concern to us," Andrei Chirilescu, Deputy General Manager for development, exploitation and strategy of Lukoil Romania, told Business Standard. He anticipates that the take-over of MOL by OMV might lead to a hike in prices on the domestic market.

"We might have to face an increase in prices, because OMV will hold the distribution market monopoly. We believe OMV will then have to sell some gas stations. We have not considered a future strategy, but if OMV buys more of MOL's shares, we will be obliged to do this," added Chirilescu.

Agip Romania officials refused to comment because this would affect the interests of its mother company, the Ita- lian Eni group. As far as MOL is concerned, company representatives in Budapest believe that "tighter collaboration between the two major companies in the region (Ed. n.: OMV and MOL) to take advantage of resulting synergies would lead to the elimination of regional competition."