Russian petroleum giant Lukoil established a big foothold in Turkey this week by acquiring Akpet, a large wholesaler of oil products. The deal, reportedly valued at U.S. $500 million, gives Lukoil control of a lubricant blending and packaging plant in Izmir, Turkey.
For Lukoil, the transaction appears motivated primarily by the opportunity to increase fuel sales in one of the regions largest markets.
Acquisition of large retail assets in Turkey expands Lukoils international retail network by 18 percent, Lukoil President Vagit Alekperov said in announcing the deal Monday. It is one of the key elements of the companys downstream strategy in the Black Sea and Mediterranean markets, aimed at supplying end users with value-added products.
Headquartered in Istanbul, Akpet is Turkeys sixth-largest fuel distributor, with contracts to supply 693 filling stations and 5 percent of the market by volume. The lube plant has capacity to produce 12,000 metric tons per year and is connected by pipeline to Tupras Izmir refinery, which includes a Group I base oil plant.
Engine oils constitute the bulk of Akpets lubricant sales, but the company also supplies gear oils, transmission fluids and a limited selection of industrial lubricants.
Lukoil did not disclose the price of the acquisition, but Reuters reported it to be U.S. $500 million. Reuters also reported that Lukoil said it aims to increase its share of Turkeys fuels market to 10 percent within a decade.