Austrian oil and gas group OMV bought a slice of Romania's largest private oil company Rompetrol yesterday in what analysts said was key to gaining a strong foothold in the Danube region.

Foraying into Romania's refining sector, OMV said it bought a 25.1 per cent stake in Rompetrol Group NV for an undisclosed amount as part of its long-term expansion strategy into Central and Eastern Europe.

"Romania is attractive...and OMV is seeking fresh, huge new acquisitions. They have no other strategy to expand in the region,fight tough competitors and meet ambitious targets," Raiffeisen Zentralbank analyst Klara Szekffy told Reuters from Vienna.

Rompetrol, which is headquartered in the Netherlands, owns the Black Sea Petromidia and Vega refineries with a total processing capacity of 110,000 barrels per day. It operates 127 petrol stations across Romania, being the second large oil firm after state-owned SNP Petrom.

OMV said it was banking on Romania's increasing purchasing power after it joins the European Union, possibly later in the decade. The second largest Eastern Europe market, with 21 million people, Romania consumes 10 million tonnes of oil products a year.

OMV, which has refining and marketing activities in 12 Central and East European states, has been active in Romania since 1999 through its wholly owned retail subsidiary and operates 40 petrol stations with a market share of 3.0 per cent.

"Our strategic target to achieve a 20 per cent market share in our Danube core region by 2008 requires access to relevant refining capacities. The acquisition of a share in Rompetrol with its Petromidia refinery offers this opportunity," OMV CEO Wolfgang- Ruttenstorfer said.

As in other Central and Eastern European (CEE) countries, OMV's target is to increase its share on the retail market to 20 per cent by 2008 in the 700-kilometre long Danube corridor running from Bavaria to Romania.

The OMV said its regional focus was mainly on Romania, former Yugoslavia and Bulgaria.

"They look to massively invest in Europe's emerging economies helped by a huge investment plan," said Szekffy, adding that Russia's largest oil company Lukoil, is one of OMV's toughest competitors.

Lukoil, with production of 1.6 million barrels per day, is awaiting the results of privatisation tenders in Poland, Greece and Croatia, where it has bid for stakes in downstream firms.

OMV is also a key strategic ally in Rompetrol's corporate strategy of growing into one of the largest oil companies in the Black Sea and Balkan region.

"I am confident that the partnership with OMV will have a beneficial effect on both companies and will become a driving force of the whole Romanian petroleum industry," Rompetrol President Dinu Patriciu said.

With group sales of 7.74 billion euro in 2001 and a market capitalisation of around 2.54 billion euro, OMV Aktiengesellschaftis Austria's biggest listed industrial firm.