Austria's OMV said Friday it is considering selling its 45% stake in the 215,000 b/d Bayernoil refinery complex in southern Germany as part of its plans to offload Eur1 billion ($1.3 billion) in assets from its downstream business by 2014.
The company has retained Deutsche Bank to manage the sale of assets from its refining and marketing business.
"Deutsche Bank has been appointed as the investment bank to handle the structuring and implementation of the divestment program in the R&M business segment and will start discussions with prospective buyers in the coming months," OMV said in a statement.
"OMV will continue focusing the refining business on refineries with integrated petrochemicals or upstream operations. Bayernoil does not have an integrated petrochemicals operation, and therefore the option to divest the 45% stake will be evaluated," it said.
OMV said in September last year it planned to sell off refining and marketing assets to focus on its more profitable upstream business.
It has already stopped operations at the 70,000 b/d Arpechim refinery in Romania.
OMV's subsidiary Petrom currently operates the Petrobrazi refinery in Romania, and OMV itself operates the Schwechat plant in Austria and the Burghausen refinery in Germany.
OMV's current refining capacity is 22.3 million mt/year (450,000 b/d), including the stake in Bayernoil, so the divestment of its stake in the German complex would see its refining capacity reduced to around 353,000 b/d, OMV said.
The other shareholders in the Bayernoil refinery complex, which operates the largest refinery network in the Bavarian region with production sites in Vohburg and Neustadt an der Donau, are Ruhr Oel (a joint venture between Russia's Rosneft and BP) with 25%, Italy's Eni with 20% and BP with 10%.
The two production sites are connected by more than 11 pipelines and therefore work together as one refinery, OMV said.
The OMV share of the capacity at Burghausen equates to around 97,000 b/d, the company said.
OMV STRATEGY
When OMV announced last September its intention to downsize its refining and marketing business, the company would not be drawn on which assets it was considering selling, but hinted that one refinery sale would help it reach its goal.
The environment for refinery sales in Europe at present is poor, with Poland failing to sell its stake in Grupa Lotos, operator of the 210,000 b/d Gdansk refinery, and Total conceding it had not found a buyer for its Lindsey refinery in the UK.
In addition, poor refining economics has seen Europe's largest independent refiner Petroplus temporarily close three of its plants after its credit lines to buy crude were frozen by lenders.
OMV said its downstream reduction strategy aims to "sharpen and simplify the company portfolio."
As part of the plan, OMV's Turkish subsidiary, OMV Petrol Ofisi, sold in November its 52% stake in the Cypriot retail company Kibris Turk Petrolleri.
And in December, OMV said it wanted to sell its retail subsidiary companies in Croatia and Bosnia and Herzegovina.
OMV said some 750 people are employed at the Bayernoil refinery network, which produces liquid gases, fuels such as gasoline, jet fuel and diesel, as well as heating oil and bitumen.
