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Oil stocks attempt to mix
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November 19, 1998: 7:08 a.m. ET
Elf Aquitaine to bid for Belgium's Petrofina according to reports
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LONDON (CNNfn) - Consolidation in the European oil sector is set to continue, according to press reports, with France's Elf Aquitaine setting its sights on Belgian group Petrofina.
Analysts said the reports could be true, although most viewed it as unlikely. "When you look at Petrofina's shareholders it's obvious that this is a company that's going to be sold one day," said an analyst who didn't want to be named, referring to the 41 percent holding built up by Belgian financier Albert Frere.
"The market likes rumors at the moment," added the analyst, who thought a Petrofina/Elf deal unlikely, "but anything is possible."
Neither company would comment on the reports.
Elf tried to take over Petrofina in 1990, but was thwarted.
Since then management at France's largest oil company has changed considerably, and current boss Philippe Jaffre has made a point of attempting to move the company into upstream activities, including oil exploration and production, as well as specialty chemicals.
Analysts say Petrofina wouldn't be a logical step in this strategy because its emphasis is on downstream activities such as refining and marketing.
Consolidation in the sector has been expected ever since British Petroleum announced its merger with U.S. group Amoco in August.
Forcing the oil companies' hands is the continuing slide in the price of their major product. The crude price hit a 12-year trough Wednesday.
Petrofina's market value is around $8.5 billion, whereas Elf is valued at about $32 billion.
In Brussels Petrofina shares jumped another 4 percent to 13,100 Belgian francs, after a similar gain Wednesday.
In Paris Elf shares rose 2 percent to 719 French francs.
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Elf Aquitaine
Petrofina
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