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. Last Updated: 07/27/2016

Plan Targets 60 Stations By Year 2000

British Petroleum plans to open up to 60 filling stations in the Moscow region by the end of 2000 in a major expansion of its oil product retailing business in Russia, company officials said Monday.

Peter Backhouse, director of BP Oil Europe, in Moscow for the official opening of BP's second filling station in the Russian capital, said the overall cost of the plan would be around $150 million.

"Our aspiration is to have 50 to 60 stations [in the Moscow region] by 2000," he said in a brief interview.

"The cost is around $3 million for each station, but the more experience we get, the lower the costs become," he said.

BP's head of Russian retailing, Harry Griffith, said the first Moscow filling station, opened a year ago, had proved a success and encouraged the company to embark on a major expansion program.

"The volumes were good, the numbers were good, and we met our expectations," Griffith said. "We now have a program to finish another seven to eight stations by the end of this year."

He said the quality of oil products provided by BP stations was "a cut above" the average Russian filling station, and that Russians were very quality conscious.

High-octane gasoline products for the new BP stations were imported from Finland, Griffith said, adding that Russia's aging refineries were struggling to meet international quality standards.

BP would consider investing in Russian refineries to supply filling stations with high-quality products in the future, but that was likely to be a long-term strategy.

"Investing in Russian refining is not a very attractive proposition at the moment," Backhouse said.

Industry analysts say Russian refining is heading for a major shakeout, with loss-making plants eventually having to shut down to reduce massive overcapacity.