Following the acquisition, the retail network will continue to operate under the Neste brand for up to 5 years
Image: Neste selling fuel retail business in Russia. Photo: Courtesy of PJSC TATNEFT.
Finnish oil and gas company Neste has agreed to sell its Russian fuel retail business, which includes 75 fuel stations and a terminal in St. Petersburg region to PJSC Tatneft, for an undisclosed amount.
Tatneft is a one of the integrated oil and gas companies in Russia. The two companies have also agreed that, following the acquisition, the retail network will continue to operate under the Neste brand for up to 5 years.
Neste president and CEO Peter Vanacker said: “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.”
“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.”
The deal is subject to approval from the Russian competition authorities and is expected to be closed by the end of this year. The transaction is expected to have no material effect on Neste’s and Tatneft’s respective financial positions.
Through the deal, Tatneft will acquire one of the largest retail network in Russia
Tatneft general director Nail Maganov 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.”
Last month, Neste signed an agreement with Rejlers, a Swedish technical consultancy services company to sell its regional business unit. Furthermore, the companies have also agreed on a long-term cooperation.
The regional business unit of Neste Engineering Solutions includes personnel and operations in Turku, Kotka, Oulu, Sweden and UAE, except for NAPCON Business Unit.