Russian oil major LUKOIL would like to buy Central European refinery companies but sees "protectionism" making takeovers impossible, a top LUKOIL executive said last week.
Vice president Leonid Fedun said the group would like to buy Poland's PKN and Lotos, Austria's OMV and Hungary's MOL.
However, government opposition is seen as insurmountable. "They talk about free trade but no one is willing to let anyone in to buy their internal assets," he told reporters at a briefing in London.
Fedun said the Moscow-based company was a natural buyer of Polish refiners because it supplies them with crude but added: "Ideologically Poland is not going to sell its assets."
Poland's prime minister said on Wednesday moves were needed to merge PKN and Lotos. The government is keen to create a national champion and protect against foreign takeovers.
Fedun added that LUKOIL had discussions with bankers about a possible move on OMV but dropped the plan even before making a direct approach to OMV because political opposition in Austria made it "impossible". "We tried but we didn't see any understanding," he said.
The vice-president also said LUKOIL was interested in MOL, which is currently defending itself against a hostile bid from OMV, but that he believed the Hungarian government would not allow any foreign buyer.
LUKOIL is also interested in refining assets across Northern and Southern Europe but Fedun said sellers' price expectations across Europe were generally too high because they thought the high margins seen since 2004 will continue.
Around a dozen refineries have changed hands in Europe in the past two years, as the western oil majors exit the historically low-margin business.
LUKOIL is also participating in ConocoPhillip's sale of the Whitegate refinery in Ireland, Fedun said, but is unlikely to be an eager bidder because the refinery is small and in need of a costly upgrade.
LUKOIL is also facing political pressures at home. Fedun said that with state-controlled companies now being favoured in the award of hydrocarbon licences, LUKOIL has been forced to form a joint venture with state-controlled Gazprom to ensure it continues to gain access to new fields.
(Reuters)