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The Commission has approved  the formation of a joint  venture between BP and
Mobil which combines their European activities in  the refining and marketing
of  fuels  and  lubricants.    BP and  Mobil  will  combine  their  fuels and
lubricants  businesses throughout Europe by  means of  partnerships (or their
local equivalent) in  each national jurisdiction.   The equity stakes  in the
partnerships will be different for  fuels and lubricants.  For fuels, BP will
hold  70% and  Mobil 30%, whilst  for lubricants  Mobil will hold  51% and BP
49%.  The fuels business as a whole will be operated by BP as  Fuels Operator
whilst  the lubricants  business  will be  operated  by Mobil  as  Lubricants
Operator.  Both operators  will be under the control  of a jointly controlled
Supervisory Committee.

The  geographic scope of the joint venture will be Western and Eastern Europe
(including  Western  Russia) plus  Cyprus  and  Turkey.   The  joint  venture
excludes  the  companies'  activities  in  international  trading,  aviation,
marine  and  shipping  as  well  as  their   operations  in  exploration  and
production, gas marketing and chemicals.

BP  is a  multinational oil  exploration, petroleum  and petrochemical  group
with three core businesses : BP Exploration, BP Oil and  BP Chemicals.  Mobil
is  a multinational  oil,  natural gas  and chemical  group  with three  core
businesses :  Exploration and Production, Marketing and Refining and Chemical
and Other Businesses.

The  joint  venture  will  operate on  a  large  number  of  product  markets
downstream from the refining  of crude oil.   This includes  the  manufacture
and  sales of  base oils,  process oils and  slack wax,  the retail  sales of
fuels (petrol, diesel and LPG);  the non-retail sales of fuels  (diesel, fuel
oil, LPG, gas oil), bitumen and automotive as well as industrial lubricants.

The joint venture will  have an overall market  share for retail motor  fuels
in Europe of  about 10%  which will put  it in third  place behind Exxon  and
Shell.  For lubricants, the  joint venture will have approximately 18% of the
total market in Europe.

All  the markets covered by the operation  have a number of common features :
the joint  venture will  compete against  the other  large transnational  oil
companies  who  are present  across  Europe  in the  same  way  as the  joint
venture.  In addition, the  parties will often face competition at a national
level from  a strong national  player which operates  wholly or  primarily in
that national territory.  

Finally, there are specialist  companies who operate in  one or a few  market
sectors  such as  lubricant only  manufacturers.   In addition  to  the above
competitors, in retail motor fuels  there are also new entrants coming to the
market in the  form of supermarket and hypermarket companies  expanding their
operations to include the sale of retail fuels.

The  other common  factor is a  general and  substantial overcapacity  in the
downstream oil industry.

The  Commission has examined in  detail a  number of markets  in which market
shares are  high.  In the  light of the Common Market  features set out above
and given  in particular significant competition  from national players (e.g.
in the Greek market for retail motor  fuels) or the high share of imports and
the possibility for  market entry (e.g. in the Austrian  lubricants markets),
the  proposed concentration is not likely  to create or strengthen a dominant
position as a  result of which competition would  be significantly impeded in
the Common Market or a substantial part of it.

The  Commission has  also  examined the  implications of  Mobil's  continuing
shareholding  in Aral  and in particular  the issue of  possible conflicts of
interest which could arise as  a result of Mobil's shareholding and its entry
into the joint venture  which will compete  with Aral in some  markets.   The
Commission has  concluded on  this issue that  while Mobil's shareholding  in
Aral  does not  give  rise to  a  likelihood of  coordination  of competitive
behaviour  between  BP  and Mobil,  the  supply arrangements  and information
flows  from Aral to Mobil following the entry of Mobil into the joint venture
may raise issues under Article 85  of the EC Treaty.  Therefore, the decision
does not cover the supply  arrangements between the joint venture,  Mobil and
Aral, nor the information flows between Aral and Mobil.


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