September 29, 2015 [Bloomberg] - Gunvor Group Ltd., the Swiss commodity trader seeking to diversify from its Russian roots, is in exclusive talks to buy Kuwait Petroleum Corp.’s Q8 Europoort refinery in Rotterdam, according to a person familiar with the matter.
Gunvor secured the talks with a bid pledging to keep the 80,000-barrel-a-day refinery operating and preserve jobs, the person said, asking not to be identified because the discussions haven’t been made public. It beat seven other offers including one from HES International BV, a storage and logistics company backed by private-equity firms Carlyle Group and Riverstone Holdings LLC.
The potential acquisition of Q8 will give Gunvor a third European refinery, alongside the plants it controls in Ingolstadt, Germany and Antwerp, Belgium. The closely held company has been seeking asset deals in Europe, Asia, Africa and the U.S. to complement its commodity-trading operations. Gunvor has earned about $1.7 billion selling Russian assets, including the Ust-Luga product terminal, after its co-founder Gennady Timchenko was sanctioned by the U.S. for his close ties to Russian President Vladimir Putin.
Seth Pietras, a spokesman for Gunvor in Geneva, where the company has its main trading operations, declined to comment on Q8. Kuwait Petroleum and its international marketing and refining unit also declined to comment.
Wider Margins
The potential deal, first reported in Dutch newspaper Het Financieele Dagblad, comes as European refineries are enjoying their best conditions in more than a decade after oil-price declines cut feedstock costs and boosted margins.
Q8 is the smallest refinery in the port of Rotterdam and its capacity trails Gunvor’s 110,000-barrel-a-day plant in Ingolstadt and the 107,500 barrels it can process in Antwerp. The Cyprus-registered company paid $150 million for Ingolstadt and $8 million for the Antwerp site, according to a 2013 bond prospectus.
HES International Chief Executive Officer Harry van Rietschoten said in June that his company was “interested” in the refinery. HES had planned to cut the plant’s capacity and convert some to storage, which would probably have meant job cuts among the 350 people employed at the facility.
Kuwait’s national oil company canceled plans last year to invest about $1 billion to upgrade the refinery and instead offered the plant for sale. While profit margins for European refineries have improved, some older plants such as Europoort, built in 1962 and acquired by Kuwait Petroleum in 1983, have still struggled.
