BRIDGEWATER, N.J -- Russian oil company LUKOIL, which operates more than 2,100 gas stations along the Atlantic seaboard, is now making its name known at 27 central New Jersey locations, rebranding them from Mobil or Getty to LUKOIL, reported The Bridgewater Courier News.
Selling about two billion gallons of gasoline a year, the company began operating in the United States with its acquisition of 1,300 Getty stations in 2000. In May 2004, LUKOIL also acquired about 800 Mobil stations in New Jersey and Pennsylvania, said LUKOIL spokesperson Joseph Shwirtz.[image-nocss]
In its acquisition of Getty Petroleum Marketing Inc., LUKOIL bought Getty common stock at a 54% premium over closing stock prices, as well as a cash merger valued at approximately $71 million. It acquired the Mobil branded sites for about $270 million, Shwirtz said.
While the deals have been in place, the signs haven't been in place until recently, the report said.
Stations are rebranding at the pace of about nine per week, averaging a cost of $50,000 a station, Shwirtz told the newspaper. Currently, conversions are being completed in the northern tier of New Jersey and the New York area. About a month after a conversion is completed, LUKOIL holds grand openings at the stations, bringing food, entertainment and representatives with gasoline and credit card incentives.
Though the company began rebranding Getty stations in 2003, when it acquired the Mobil stations, LUKOIL decided to convert the Mobils before completing the Getty sites in its portfolio, Shwirtz added.
At Denson's Auto Repair in Bridgewater, N.J., a former Mobil station, the pumps and canopies have already adopted the trademark LUKOIL signs. It's been a fairly seamless conversion, Billy Denson, whose father, Bill, bought the station in 1984 when it was a Chevron, told the Courier News. The station had been a Mobil for about 15 years, Denson said.
The Densons are independent owner-operators, owning the land, tanks and pumps at their location. Last summer, they learned LUKOIL bought Mobil's existing contractsincluding theirs, which had three years remaining, Billy Denson said. They decided to continue and, as one of the remaining Mobils to face conversion, began telling customers about the change a month ago, Denson said. So far, he said, the feedback has been good.
And a lot of his customers knew about LUKOIL because the former Mobil and Getty stations along the Garden State Parkway and New Jersey Turnpike are now sporting the big red signs, said the report, those supply contracts also having been bought as part of LUKOIL's deal.
Denson said he thinks the conversion also will bring lower prices at the pumpmaybe as much as five cents a gallonbecause LUKOIL no longer has to pay Mobil a franchise fee.
Jimmy Ulfat, owner of the Somerville LUKOIL & Mart, which underwent sign, lighting and credit card conversions nearly two week ago, said he expects prices to be better. They're trying to become bigger in America. They're going to give me cheaper gas, and I'm going to sell cheaper gas, he told the paper. Ulfat, who is planning a grand opening in September, said gasoline sales have been slow, which he expects is normal until people get used to the change. Though business is slower, Ulfat said he's happy with how the station looks, particularly the lighting strips in the columns of the gasoline pumps. It's like a sun here at night, he said.
The LUKOIL station in Watchung, N.J., had its grand opening about two weeks ago, said Edgar Olmo, an employee. He said rebranding occurred about three months ago. Business has slowed down, Olmo said. People don't know the name. A lot of people are scared to try new gas once they are used to something else. Regular customers who often fill up every other day are already adjusting, however, and have asked for LUKOIL card applications, he added. It's going to catch on, said Olmo.
It's good [for the country] to know there's another player out there, Shwirtz said. The governments of the United States and Russia are pretty outspoken about bringing energy resources closer together. They've done a lot to revamp and renew those sites. People are looking for convenience and price, not who provides the fuel, he said.
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