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. Last Updated: 07/27/2016

Oil Majors Set Sights on BP's German Network

LUKoil, Yukos and Tatneft are looking to buy British Petroleum's 800-outlet gas-station network in Germany, German and Russian media reported.

David Nicholas, a BP spokesman in London, confirmed Monday that BP is in negotiations with a number of potential buyers, but he declined to name them. BP declined to name a price for the stations.

A source close to Tatneft said the oil company is considering buying 340 of the stations in southern Germany, although the final decision will be made at an upcoming board meeting.

LUKoil dismissed the reports and declined to comment on the deal Monday. However, a LUKoil spokesman was quoted in the Vedomosti newspaper as saying that the No. 1 oil major was interested in purchasing the gas stations and had registered a daughter company, LUKoil Hamburg GmbH, to conduct the deal.

A source close to Yukos said that the company is interested in buying the stations if the price is right, in line with the No. 2 oil major's plan to boost investments abroad.

BP is selling 460 stations in northern Germany and 340 in the south -- as well as a 45 percent stake in the Bayernoil refinery in Ingolstadt in the south -- to comply with European Union and German legislation saying that no company can control more than 22 percent of the country's gas-station market, Nicholas said.

BP ended up with 26.5 percent of the German market last year after it purchased Veba Oil, which controlled the Aral network.

Analysts were cautious in putting a price tag on the deal, saying too little was known about the condition of the gas stations, their exact location and profitability.

LUKoil bought the 1,300-outlet Getty Petroleum gas-station chain in the United States for $71 million.

The offer could be attractive for Yukos and LUKoil, said Valery Nesterov, an analyst at Troika Dialog.

Yukos is probably interested in the stations in the north due to their proximity to its Mazheikiu Nafta refinery in Lithuania, he said.

LUKoil is likely eyeing the southern stations, particularly if the oil major could snap up the stake in the Bayernoil refinery in Ingolstadt, which would be able to receive LUKoil crude supplies from the Mediterranean, Nesterov said.

Furthermore, buying the BP assets would be a big breakthrough for LUKoil after a string of unsuccessful attempts to purchase assets in Europe earlier this year, he said.

LUKoil's efforts to purchase part of Poland's Gdansk refinery, the second largest in the country, failed earlier this month after Britain's Rotch Energy dropped it from a list of joint bidders.

Meanwhile, the company's negotiations to purchase 23 percent of Greece's Hellenic Petroleum refinery are on the rocks.