COMPANY OF THE WEEK
Sunday 06 September 1998
Shell will hold 88 per cent of the venture. The two companies control, or have stakes in, 19 refineries that process 2.1 million barrels of oil a day, or 15 per cent of Western Europe's oil needs.
"It's a defensive move," said Irene Himona, an analyst with ABN Amro. "It's a way to reduce costs by avoiding duplication and strengthening market share because returns in the European refining business have been so low." Profits earned by Shell's refining business fell 5 per cent in the first half, to $1.28bn.
A year ago, Shell, Texaco and Saudi Arabia's state-owned oil company agreed to combine refining and fuel sales in the US, in a venture that is expected to save $800m a year.
Shell and Texaco said the European combination will lead to pre-tax savings of at least $200m a year, and Shell said job cuts are likely. Regulators must approve the venture, which Shell said could be completed in mid-1999.
Savings from the alliance, which will sell under both the Shell and Texaco brands, will come from job cuts, closing service stations and consolidating fuel-delivery trucking routes in areas with overlap, analysts said.
The venture will combine Shell's 17 refineries in Europe with Texaco's one plant in Pembroke, Wales, and one in Rotterdam, where it owns 35 per cent. Shell has 25,000 employees in its refining and marketing unit in Europe and Texaco has 4,300. Shell has 12,954 fuel stations across the Continent while Texaco has 2,984.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...