Wind Power-Rising costs unlikely to derail plans

Wind Power-Rising costs unlikely to derail plans - Industry...

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Industry Comment MarketWatch: Global Round-up © Datamon itor, April 2008 - 166 - Galp: bidding to overtake BP in Spain Galp has stated that it plans to add 100-200 service stations to its Spanish network, in order to overtake BP in terms of service station numbers and become a top three player. The ideal situation for Galp’s bid would be for BP, which has struggled in the past, to exit the market and sell its sites. However, given BP's strong refining presence in the country this is an unlikely outcome. Portuguese petrochemicals giant Galp, which acquired Agip's 330 petrol stations in October 2007, plans to become one of the three largest fuel retailers in Spain; along with Repsol YPF which has 3,600 sites and Cepsa which has 1,600. The company has stated that this is in line with its status as the third largest refiner in the Iberian petrochemicals sector. In order to achieve this, Galp is seeking to build its network to a total of 700-800 stations. This would represent a substantial increase on its current 593 stations and see it overtake UK operator BP. Despite its huge global presence, BP is a relatively small player in Spain. It holds a market share of just 4% which is much lower than it would tolerate in most other markets. Furthermore, ever since BP established itself in the Spanish market, it has struggled to compete against the large national players Repsol and Cepsa. The ideal situation for Galp would be for BP to sell its stations in Spain leaving Galp with a large number of available sites to purchase. However, despite BP's turbulent time in the Spanish market, it is unlikely to sell up shop. Indeed, the company has actually been increasing its number of service stations rapidly, adding 137 stations to its network between 2000 and 2008, which is twice as many as Galp.
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This note was uploaded on 03/03/2010 for the course ECON E103 taught by Professor Johnson during the Spring '08 term at Indiana University South Bend.

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Wind Power-Rising costs unlikely to derail plans - Industry...

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