STATOIL has agreed to sell 80 petrol stations to Maxol as part of a deal to enable the Norwegian company to take over Conoco's Jet NetWork in the Republic.
Statoil's purchase of Conoco's 259 Jet petrol stations, which would have given it just over a 25 per cent share of the £1 billion Irish market, was blocked by the Competition Authority last February.
Under the new deal, which has been approved by the Minister for Enterprise and Employment, Statoil will have a market share of Just under 20 per cent. Statoil had mounted a High Court challenge to the prohibition of the Jet deal but this case was struck out yesterday.
The initial acquisition of Jet was blocked because of fears that it could reduce competition and lead to higher petrol prices. The value of the transactions has not been disclosed however, Statoil's original bid for the entire Jet network was estimated to be in the region of £25-£30 million.
Aside from the sale of 80 stations to Maxol, Statoil must also divest itself of at least five other stations and sell the small Estuary chain which was owned by its sister company Statoil UK. Estuary, which has 51 stations with a combined 1.4 per cent share of the market, is likely to be a target for one of the smaller Irish petrol retailers.
Following the deal, Esso will remain market leader with a 23 per cent share of petrol sales, while Shell and Texaco have about 17 per cent each. Maxol's market share will increase to 15 per cent.
Mr Bruton said the new deal created "a good framework" for a price competitive marketplace.
"I am satisfied that there will be healthy competition," he added.
The Minister said there will now be five major players in the motor fuel industry, compared to three previously. Mr Bruton also announced yesterday that he intends bringing forward a new order to ensure that petrol stations display their prices prominently.
Fianna Fail's enterprise and employment spokeswoman, Ms Mary O'Rourke, said the original deal should have been allowed, and described Mr Bruton's decision as an amazing turnaround".
The managing director of Statoil Ireland, Mr Ray Clinton, said that, while the amended deal had brought "some difficult decisions", the company was "firmly convinced that it will be of long term benefit to consumers at large and to everyone in our.
The amended proposal approved by Mr Bruton also addresses the issue of pricing a key element of the Competition Authority report. Jet operates a scheme with dealers whereby both parties take a lower gross in the expectation that the resulting increase in business will more than compensate for the reduced margin.
The Competition Authority report, the findings of which were rejected by Statoil, had warned that the Norwegian company was a higher price operator and would not alter its strategy. However, a Statoil spokesman said last night that the Minister had "been given an assurance" that it would follow Jet's pricing strategy.
The deal will expand Statoil's network in the Republic from 183 petrol stations to 357, and is expected to substantially increase the company's turnover. Statoil Ireland had sales of about £126 million last year, producing a pretax profit of £2.85 million. Conoco's Jet network has a turnover of about £170 million.
Maxol's group general manager, Mr Tom Noonan, said that while there may be a perception that Maxol was simply taking the gross from the Statoil Jet deal this was not the case. "We wanted good quality stations in areas where we're not represented, and that's what we've got."
