European Commission - Press release
Mergers: Commission clears Angolan liquefied natural gas joint venture by BP, Chevron, Eni, Sonangol and Total
Brussels, 16 May 2012 - The European Commission has cleared under the EU Merger Regulation the proposed acquisition of joint control over the Angolan company Angola LNG (the joint venture) by BP of the UK, Chevron Global Energy of the US, Eni of Italy, Sociedade Nacional de Combustíveis de Angola (Sonangol) of Angola and Total of France. The joint venture will be active in the production of liquefied natural gas ("LNG") in Angola and the worldwide supply of LNG. The Commission found that the transaction would not raise competition concerns because of the joint venture's moderate anticipated market share, the presence of a number of credible competitors in the market concerned and competitors’ unchanged ability to access re-gasification terminals.
The joint venture would transform natural gas, obtained as a by-product from oil production and transported along pipelines to its liquefaction plant in Angola, into LNG. LNG is natural gas that has been cooled to approximately -162° Celsius for shipment and/or storage in liquid form. The LNG would then be sold to customers around the world for re-gasification.
The parties' activities overlap in the market for the wholesale supply of LNG in the EEA. Given the JV's moderate anticipated market share and the presence of a number of credible competitors, the Commission found that the joint venture and its parent companies will continue to face sufficient competitive constraints on the market for the wholesale supply of LNG. Although three of the parent companies (Total, Eni and BP) hold capacity rights in re-gasification terminals in the European Economic Area (EEA), they will not be able to shut out third parties from accessing them because EU law ensures third party access to gas import infrastructures, including re-gasification terminals. Thus, the creation of the joint venture does not lead to any change as regards competitors’ ability to access gas import infrastructures.
The Commission therefore concluded that the transaction would not impede effective competition in the EEA or any substantial part of it.
The transaction was notified to the Commission on 4 April 2012.
Companies and products
BP, Chevron, Eni and Total operate worldwide in the exploration, production refining and marketing of oil and gas products. Sonangol is the sole concessionaire for the exploration of oil and gas on the subsoil and continental shelf of Angola.
Merger control rules and procedures
The Commission, in 1989, was given the power to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation). Its duty is to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
A non-confidential version of today's decision will be available at: