* Van Poecke says has growth plan for Carlyle/Vitol JV
* Follows JV buying into German refinery this week
* Says best refineries can survive and make money
By Ron Bousso and Dmitry Zhdannikov
LONDON, Dec 20 One of Europe's most successful
oil entrepreneurs, Marcel van Poecke, is back with a plan.
Having made his name and fortune in oil refining during the
peak years of the early and mid-2000s, the Dutchman wants to
repeat that success in the next few years despite predictions of
a demise for the sector in Europe.
The message now from the businessman is much more nuanced
than a decade ago. He sees no revival for European refining that
faces severe competition from plants in Asia, the United States
and the Middle East.
However, the best refiners can survive and still make money,
says the man who is spearheading private equity giant Carlyle
Group's tie-up with the world's top oil trader Vitol
to run refining, storage and distribution assets in
Germany and Switzerland.
"We have a clear ambition to grow and that's what Carlyle is
about ... Growth capital and growing companies. Vitol is the
same," Van Poecke, managing director of Carlyle International
Energy Partners (CIEP), told Reuters.
Carlyle's move this week to enter the Varo joint venture
with Vitol to buy a 45 percent in Germany's 260,000 barrels per
day Bayernoil refinery from Austrian group OMV raised
eyebrows as Europe's oversized refining sector which is in the
midst of a painful restructuring.
Carlyle International Energy Partners (CIEP), set up by the
fund last year, this week bought a 50 percent stake in Varo,
which already owns Swiss refinery Cressier as well as storage
and distribution facilities in the region.
"It is difficult to say where that (Varo) will go but it is
clear it will grow," said Van Poecke.
"This is really growth capital as I see it. Building a new
company to benefit from the restructuring of the market. It is
not selling high and buying low, its really about building a new
Van Poecke owns AtlasInvest, an investment holding company,
which had a minority stake in Varo Energy venture with Vitol.
The stake was bought out by Carlyle. The cost of the deals was
Van Poecke was also one of the founders of independent
refiner Petroplus, in which Carlyle and another fund Riverstone
He exited Petroplus in 2006, seen as one of the peak years
for European refining, after an initial share offering which at
the time generated the highest multiple return investment for
the Carlyle/Riverstone Energy Fund.
The fortunes of Europe's refining saw a steep decline at the
end of last decade and Petroplus went bankrupt two years ago,
weighed down by heavy debt and low profit.
The partnership with Vitol, which in two years bought two
refineries, makes perfect economic sense to van Poecke. And in
the current environment, Varo could serve as a model for other
trading companies and private equity fund, he added.
"Vitol have access to all sorts of crudes and know the
market very well."
"This could be the direction the market takes as more major
oil companies are leaving the space. There is room for companies
like Vitol combined with private equity like Carlyle to get into
this space. It is a very natural fit."
The European refining sector is expected to shed at least
one million bpd, or around 10 percent of its capacity, in the
But the key for a successful investment lies in the location
and distribution network, according to van Poecke.
"We would like to grow around this core area which we think
is very good. Along the Rhine river, (the sector is) very strong
in Germany and also in Switzerland."
"It is a difficult time for European refining but some
refineries do better than others and what we are focused on are
refineries that are best in their class not only compliant with
the newest legislation but also very specific in terms of the
products they can make."
He said Europe was still short diesel, jet fuel and heating
oil and with every refinery closure those shortages could get
bigger: "We need a balance between refining, marketing and