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. Last Updated: 07/27/2016

LUKoil Eyes Foothold in the Balkans

VIENNA, Austria -- Domestic oil major LUKoil and Hungary's Mol Rt. submitted bids to buy Serbia's second-largest fuel retailer, Beopetrol, as they seek to benefit from rising fuel demand in the Balkan country.

Greece's Hellenic Petroleum SA was disqualified for failing to submit correct documentation to buy 79.5 percent of the company, the Serbian government's tender commission said at a meeting in Belgrade, the Serbian capital.

LUKoil and Mol are competing with Austria's OMV AG and Poland's PKN Orlen AS, which are trying to expand in Eastern Europe, where economies and fuel consumption are growing faster than in the West. After expanding in Croatia, Serbia is a logical move for Mol, investors said.

Political resistance to selling East European companies to Russian buyers and the absence of OMV, which analysts had expected to bid, may favor Mol, which last month agreed to pay $505 million for 25 percent of INA Industrija Nafte in neighboring Croatia.

The stake in Beopetrol, which has 179 filling stations in Serbia, is valued at 100 million euros ($114 million), Hungarian business weekly Figyelo reported.

LUKoil, Russia's second-largest oil producer, has refineries in Russia, Ukraine, Romania and Bulgaria. LUKoil, with 3,590 gas stations, including about 900 in Eastern Europe and the former Soviet Union, is looking for an outlet for its fuels. The company three years ago bought Getty Petroleum Marketing Inc. in the United States.

Mol is expanding to be able to compete with Western firms when Hungary joins the European Union next year. It has spent more than $1.1 billion on acquisitions in the past three years, buying refineries in Slovakia and Croatia.