Russia's state-owned energy giant Gazprom is preparing an ambitious bid to become one of the biggest fuel suppliers in Britain, The Sunday Times reported. Gazprom is expected to file an offer this week for a network of 800 petrol stations and the Lindsey oil refinery at Killingholme, Lincolnshire, the paper said.
The assets have been put up for sale by the French oil group Total. It has hired JP Morgan, the investment bank, to sell its U.K. business, which employs 5,000 people. The business is expected to fetch more than 1 billion British pounds ($1.49 billion), the paper said. "The auction is part of a remarkable shake-up of Britain's oil refining and distribution industry. Half of the refining capacity, built up in the 1960s and 1970s to take production from a booming North Sea, is up for sale as energy giants look to sever ties with the low-margin, low-growth British market," the paper said.
Gazprom is expected to bid for the Total assets through its oil arm, Gazprom Neft. Total's assets put up for sale also include the 247 km (153 mile) underground pipeline from Lindsey to the Buncefield fuel depot, which serves southeast England and Heathrow airport, the paper said.
Other bidders include India's Essar and Valero, the American refining giant, and at least one private equity bidder, the paper said.
If Gazprom buys Total's business in Britain, the Russian energy giant would hold a dominant position on the U.K. fuel market, which could cause the British government's concerns, the paper said.
