Finnish oil refiner Neste Oil said on August 29 it was looking at various acquisition possibilities among European refineries and that its refining margins grew in August after a thin July.
Chief Financial Officer Petri Pentti told Reuters that many leading European oil companies were directing investment primarily into upstream assets, or oil and gas exploration, and were looking to divest from some of their refineries.
"We are keeping our eyes open to developments in the mergers and acquisitions market," Pentti said in an interview during an oil industry conference in the Norwegian capital.
"We can tap some assets the majors could be disposing." He said Neste was "focused on north-western Europe" and preferred coastal locations, which would make exports easier.
Also the group would like a facility that could process both North Sea crude and the lower-cost Russian Urals crude that usually drives its Finnish refineries. Pentti said that Neste, a high-end refiner with ambitions to become the world's leading producer of bio-diesel, would not buy a refinery just to increase its throughput capacity.
"There have to be additional benefits, such as possibly the ability to expand the refining facilities, possibly into bio-diesel," he said, adding that Europe faced a shortage of diesel refineries amid growing popularity of diesel cars.
Neste usually beats average international refining margins, because it has access to cheaper Russian oil supplies, but it said on August 3 that its refining margins were low in July after a fat first half of 2007.
Pentti said Neste had a record of beating its 15 percent ROACE target and that new diesel refining capacity coming on stream in the medium term would keep its profitability up.