With the new year bringing several opportunities for the global energy industry, a new major downstream refining player has emerged in Europe. Varo Energy, a Swiss-based oil refinery, has completed its acquisition of Swedish Preem AB, forming a new company that will be known as VAROPreem. As the leaders and heads of state came together at the World Economic Forum in Davos, a new era of European refining opportunity has emerged, thanks in no small part to the VAROPreem company.
A new European refining company brings a sense of renewed optimism for the continent
Europe as a whole has been actively implementing measures to reduce the reliance on imports of essential energy resources and contemplating measures to enhance energy independence. For far too long, several European nations have not had sufficient support to develop new refineries and operations that could increase energy generation.
With Varo acquiring Preem, the transaction brings together two main European energy producers and enables the new company to develop a critical energy infrastructure that could transform the region’s energy industry in the new year.
With the new leadership within VaroPreem, noting that once all the regulatory approvals have been granted, the company will become Europe’s third-largest independent refiner of essential energy resources as well as the second-largest renewable fuels producer. The new company will combine several operations to establish six manufacturing hubs in several European nations, namely:
- Sweden: Lysekil and Gothenburg
- Germany: Neustadt and Vohburg
- Switzerland: Cressier
- Netherlands: Coevorden
“The creation of Varopreem marks a defining moment for Varo and Preem. Together, we have created one of Europe’s most significant energy companies, built on the dedication of colleagues whose work has made this possible.” – Dev Sanyal, Group Chief Executive Officer, Varopreem
VaroPreem has established a new leadership team to advance operations in Europe
The six new facilities that fall under the newly-established VaroPreem company will provide 530 kbd of conventional fuel processing capacity, as well as boost the company’s renewable fuel capacity by 1.3 million tonnes per year, essential to meeting the anticipated increase in demand.
VaroPreem has stated that the company has access to over 120 terminals around the European continent and will supply customers in 33 countries. The company has estimated that the new business will meet approximately 10% of the needs of the European mobility market through its substantial fuel refining facilities.
The newly appointed Executive Board of VaroPreem consists of the following individuals:
- Dev Sanyal, Group Chief Executive Officer
- Magnus Heimburg as Deputy CEO and EVP Markets & Customers
- Georges Menane as EVP and Group Chief Financial Officer
As the energy needs of the world are set to reach new heights this year, developing new refining hubs to meet increased demand has become a top priority for the world. For Europe, the newly created VaroPreem stands at the ready to deliver vast amounts of energy to the European market.
VaroPreem has noted that the acquisition was financed through a debt package from 15 international lenders, expanding the stakes of the development to provide significant returns on investments for the global financiers.
VaroPreem is set to provide a new surge in refining capacity for the European continent
As new technology emerges in the renewable energy industry, the reality is that refining companies in Europe are facing a paradox at the moment: either develop new partnerships and companies that can boost energy supply and security, or invest in the renewable energy market as it is set to overtake the conventional fossil fuel-based sector over the coming years. The newly established VaroPreem will provide Europe with a much-needed boost in refining capacity as 2026 will see dramatic increases in energy demand across the international energy market.
