Total, the world's fourth-largest petroleum giant, is returning to Romania in a surprise deal after a three-year absence.
Total is currently in talks for a partnership with automotive and industrial lubricant maker Lubrifin SA Brasov, one of the top players on its market, with the French set to contribute 12-13 million euros to the deal, sources close to the talks told Ziarul Financiar.
"Lubrifin assets are currently being correlated with the market value and the company's position on the Romanian market. This assessment will decide what contribution in kind Lubrifin will make on establishment of the joint venture and how much capital Total will contribute," the sources said.
Total group officials had not commented on the issue by the time of going to press.
Lubrifin SA Brasov completed a 16 million-euro investment in an automotive and industrial oils factory this year, paid for by reinvesting previous profits and with 6 million euros in bank loans. Its portfolio includes the Lubrifin oil brand, which is very well known on the market and one of the top domestic players, accounting for 13-15% of the lubricant market in Romania and estimated by some at 90-100 million euros a year.
Until now, Total's lubricants were sold in Romania through three different dealers.
Lubrifin SA Brasov, initially established as Petroleum Factory Brasov in 1879, is owned by a group of individuals, which includes the management, and by the Bucharest company Alpha, which holds 12-15%, according to sources.
Total has announced its intention to have the control of the new joint venture, with the details of the transaction to be worked out next week.
Lubrifin Brasov's production capacity stands at 30,000 tonnes of oils a year. It is involved in both research and development, and the sale of lubricants. Its competitors on the domestic market are the strong brands of Shell, Aral, Agip, Texaco, Prista Oil, Castrol (a British Petroleum brand), MOL, OMV and LukOil.
Total left the Romanian market around three years ago, following the failure of its explorations in the Neptun block, which it carried out in partnership with US company ConocoPhilips.
adrian.mirsanu@zf.ro
