Neste to divest its fuel retail business in Russia and sell it to PJSC Tatneft
LONDON: 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.