Varo Energy to raise stake in Germany's Bayernoil refining complex

European downstream firm Varo Energy said it had agreed to increase its stake in a major refining complex in Germany to up to 55% by buying shares from oil major BP.

Swiss-based Varo currently holds 45 percent of the Bayernoil complex while BP holds 10%. Bayernoil consists of two plants - Vohburg and Neustadt - with a combined capacity of 220,000 barrels per day. Italy’s Eni and Russia’s Rosneft hold the remaining interests.

As part the agreement with BP, Varo will also acquire the major’s polymer modified bitumen plant at Vohburg and a 9% stake in the major crude oil pipeline TAL that brings oil from the Italian port of Trieste to central Europe.

Varo partially restarted the Vohburg plant in June after a devastating fire at the gasoline-making unit last year.

“The Bayernoil refinery is a key strategic asset for VARO’s operations in Germany and beyond. Investing in additional shares will offer greater flexibility and help us further optimize our logistics to continue to best serve our customers,” Varo CEO Roger Brown said in a company statement.

The transaction is expected to close in the coming months.

The company also operates Switzerland’s only refinery at Cressier and has storage and retail assets in Western Europe. It is owned by oil trading giant Vitol, U.S. private equity firm Carlyle Group and Dutch firm Reggeborgh Invest.

Varo’s shareholders cancelled a floatation on the Amsterdam stock exchange in 2018 and held talks earlier this year on selling part of the firm with an outside investor including Hong Kong tycoon Henry Cheng. (Reporting By Julia Payne; editing by David Evans)