Neste to divest its fuel retail business in Russia and sell it to PJSC Tatneft
Neste Corporation, Press Release, 5 July 2019 at 9 am (EET)
Neste Corporation has signed an agreement to sell its fuel retail business consisting of 75 fuel stations and a terminal in St. Petersburg region to PJSC Tatneft, one of the leading integrated oil and gas companies in Russia. The divestment has no impact on Neste’s Marketing & Services' operations in Finland and the Baltic countries.
“Neste targets to become a global leader in renewable and circular solutions. The divestment of Russian fuel retail business will enable us to focus on our strategic priorities,” says Neste’s President and CEO Peter Vanacker.
“Over the years we have developed the operations in St. Petersburg area into a successful business with approximately 1,000 employees who are known for their outstanding customer service and commitment to high health, safety and environmental standards. We are happy that Tatneft is keen to develop our fuel retail business in Russia further,” continues Vanacker.
“Neste has an extensive network of over 1,000 stations in Finland and in the Baltic countries. We focus on developing our solutions and services in Finland and the Baltic countries, where we can supply Neste MY Renewable Diesel and other high-quality fuels from our own refineries,” says Panu Kopra, Executive Vice President of Marketing & Services business unit.
Nail Maganov, the General Director of Tatneft, said: “Tatneft’s retail network is one of the five largest Russian chains with more than 600 own petrol stations. The retail sales strategy focus is on the realization of high-grade fuels produced at our state-of-the-art refinery TANECO and provision of high quality service to our customers, including convenience store services (i.e., café, shops). The acquisition of Neste's retail business in the North Western Russia, which is one of the highest priority regions for Tatneft, is a significant contribution to the achievement of our strategic goals, including the marketing of approximately 50% of our own produced fuels domestically. One of the key priorities in developing and operating Tatneft’s retail network is to minimize environmental impact. Neste is one of the leaders in this field in Russia, which would allow us to expand and promote the best practices in this area throughout our operation”.
Pursuant to a separate agreement between Tatneft and Neste following the acquisition the retail network will continue to operate under the Neste brand for up to 5 years.
The parties have agreed that the transaction price shall remain confidential. The transaction will not have a material effect on Neste’s and Tatneft’s respective financial positions. The completion of the divestment is subject to the approval of the Russian competition authorities and the transaction is estimated to be completed by the end of 2019.
Vice President, Communications (act.)
Neste: Panu Kopra, Executive Vice President, Marketing & Services, tel. +358 50 458 9444
PJSC Tatneft: Dmitry Petrov, Deputy head of department for development and corporate support of projects, tel. +7 495 730 0482
Tatneft in brief
PJSC Tatneft (TATN, Moscow Exchange; ATAD, LSE) is one of the largest vertically integrated oil companies in Russia with its core operations located in Tatarstan, Russian Federation. In 2018 Tatneft Group produced 29.5 million tonnes (210.4 MMbbl) of crude oil and 925.3 million cubic meters of gas. Tatneft operates the most modern and one of the most complex refineries in Russia TANECO, including which Tatneft produced over 8.9 million tonnes of refined products in 2018 with the light product yield of around 84%. In 2019 TANECO launches second initial processing unit that will allow Tatneft to produce 203 000 barrels per day of refined products already by the end of 2019 and reaching 293 000 barrels per day in the future. Tatneft is also involved in petrochemicals’, mainly tires, production and marketing, manufacturing of equipment for the production, treatment and refining of oil and gas, as well as engineering, procurement and construction services for oil, gas and petrochemical projects and, from 2016, in banking activities. Tatneft’s consolidated sales and other operating revenues on non-banking activities net of export duties and excise taxes in 2018 were 910,534 million Rubles (US$ 14,520 million). Additional information is available at www.tatneft.ru
Forward-looking statements: This press-release contains certain statements about future events and expectations that are forward-looking in nature, as well as judgments and assumptions. Any statement in this press-release that is not a statement of historical fact is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements expressed or implied by such forward-looking statements to differ or are judgmental and assumptive. PJSC Tatneft and Neste Corporation assume no obligations to update the forward-looking statements, judgments and assumptions contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements.
Neste in brief
Neste (NESTE, Nasdaq Helsinki) creates sustainable solutions for transport, business, and consumer needs. Our wide range of renewable products enable our customers to reduce climate emissions. We are the world's largest producer of renewable diesel refined from waste and residues, introducing renewable solutions also to the aviation and plastics industries. We are also a technologically advanced refiner of high-quality oil products. We want to be a reliable partner with widely valued expertise, research, and sustainable operations. In 2018, Neste's revenue stood at EUR 14.9 billion. In 2019, Neste placed 3rd on the Global 100 list of the most sustainable companies in the world. Read more: neste.com