Neste to divest Russian fuel retail business and sell it to PJSC Tatneft
Finland’s Neste Corp. has signed an agreement to sell its fuel retail business consisting of 75 fuel stations and a terminal in the 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 our Russian fuel retail business will enable us to focus on our strategic priorities,” says Neste President and CEO Peter Vanacker.
“Over the years we have developed the operations in the 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,” Vanacker says.
“Neste has an extensive network of over 1,000 stations in Finland and in the Baltic countries. We will 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 Neste’s Panu Kopra, executive vice president, Marketing & Services business unit.
Nail Maganov, general director of Tatneft, explains that Tatneft’s retail network is one of the five largest Russian chains, with more than 600 company-owned 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 northwestern Russia, which is one of the highest priority regions for Tatneft, is a significant contribution to the achievement of Tatneft’s strategic goals, including the marketing of approximately 50% of its local fuel output, he says.
“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,” he adds.
Pursuant to a separate agreement between Tatneft and Neste following the acquisition of Neste’s retail network, the service stations will continue to operate under the Neste brand for up to five years.
The transaction price is confidential and completion of the divestment is subject to the approval of the Russian competition authorities.
The transaction is estimated to be completed by the end of 2019.