Chevron Press Release - Chevron and Ariba Unveil Petrocosm Marketplace
March 23, 2000 -- Petrocosm announcement: "Texaco joins global internet marketplace, Petrocosm, as a founding member; Halliburton executive named CEO"
Petrocosm to be owned by energy industry companies; Powered by Global Ariba B2B eCommerce platform and Requisite eContent management
SAN FRANCISCO and MOUNTAIN VIEW, Calif., Jan. 19, 2000 -- Chevron Corp. and Ariba, Inc. today announced an agreement to create Petrocosm Marketplace, the first global, independent internet marketplace to be owned by buyers and suppliers across the energy industry.
Petrocosm Marketplace is planned to be an open internet marketplace and exchange that will go live in the second quarter, 2000, at www.petrocosm.com. It intends to offer browser-based access with internet-hosted procurement to enable companies of all sizes to buy and sell products and services that span the oil and gas industry supply chain: drilling, electrical, pipes, valves and fittings; and professional, engineering, and construction services. This venture is expected to enable companies in the energy industry to leverage the internet to derive cost savings, new revenue streams and competitive advantage. Based on independent market research, Petrocosm estimates that net market electronic trading benefits such as aggregated purchasing, lower transaction costs and seamless access to larger global markets could drive $11 billion in oil and gas industry savings and efficiencies.
"The energy industry is being transformed by the internet and business-to-business (B2B) eCommerce," said Dave O'Reilly, chairman and CEO, Chevron Corp. "Chevron is playing a very active role in adopting this technology to increase the efficiency of our business processes."
"Chevron is visionary in its cooperative approach to providing an independent, efficient trading environment for its industry," said Keith Krach, chairman and CEO of Ariba. "Chevron also provides an excellent example of how an innovative large buyer can both save and profit in the new economy by extending its own B2B eCommerce infrastructure and purchasing power to create an open, scalable, industry net market."
Petrocosm Marketplace is designed to use the Ariba B2B eCommerce platform, including Ariba Network commerce services, Ariba ORMS application, Ariba ORMX hosted service, Ariba IBX marketplace services, and net market and dynamic pricing solutions and services which Ariba will gain through its pending mergers with TRADEX Technologies and Trading Dynamics
As eContent manager for Petrocosm, Requisite is expected to utilize its internet-based eMerge catalog toolset to establish and manage the Petrocosm supplier content. Through the use of its unified structure, Requisite intends to enable oil and gas industry suppliers to rapidly develop and manage a high quality, integrated catalog.
"The success of internet marketplaces is dependent on supplier enablement and effective catalog content management," said Barbara Mowry, president and CEO of Requisite. "We're delighted to extend our capabilities to help create this exciting new net marketplace leader for the energy industry."
Petrocosm Corp. is an entrepreneurial, venture-backed company in which Ariba, Chevron and Crosspoint Venture Partners each have invested to hold minority stakes. The majority of equity ownership in Petrocosm is expected to be held by energy industry participants of all sizes. The equity stake for each participant is expected to be based on the amount of business committed through the internet marketplace, with special consideration for those who commit sooner. Ariba is also expected to receive revenues based on a percentage of transaction-based network revenue streams.
"We believe neutrality is an important success factor for industry trading exchanges," said Bruce Richardson, senior vice president of research for Boston-based AMR Research. "In the case of Petrocosm, not only has a new independent company been created, but the players have taken the concept of neutrality further by creating an equity structure that encourages industry ownership and broad participation from both buyers and suppliers. Not only is there an equity play for participants, but they can also benefit from the efficiencies created by such exchanges. For buyers, for example, we estimate savings potential from 5 percent to as much as 30 percent of spending."
"Participants can broadly share in the economies of scale, market efficiencies, and equity created by Petrocosm," said Don Paul, vice president, technology, for Chevron. "We believe this company-neutral approach -- with an entrepreneurial management team and experienced venture capital backing -- is critical to the broad adoption and ultimate success of this marketplace."
The marketplace is expected to include rationalized, energy industry-specific catalogs with millions of items together with services for supplier enablement, hosted and enterprise e-procurement for goods and services, auctions, reverse auctions, bid/ask exchanges, strategic sourcing, spot buying, customer-specific pricing, electronic payments, logistics, integration to ERP systems and online community forums.
Application of this type of technology has been discussed at the American Petroleum Institute's Petroleum Industry Data Exchange (PIDX). "We are pleased to see activities that leverage B2B technology to benefit energy industry buyers and sellers, an objective of PIDX, the eCommerce committee of the API," said Kendra Martin, director of eBusiness for API.
Chevron, a San Francisco-based company with $30 billion in annual revenues and $60 billion market capitalization, intends to help initiate the net market's transactional liquidity by targeting a substantial portion of its annual $10 billion in spending through Petrocosm.
Further, to accelerate deployment and time-to-benefit for all participants, Chevron and Ariba will leverage components of the Ariba procurement solution that is already fully functional in Chevron's Bakersfield, Calif. operations. This Ariba implementation has been enhanced since early 1999 to support energy industry requirements, including industry-specific supplier catalog content, and is now capturing 90 percent of the business unit's annual materials purchasing.
"We've been pleased with the robustness and scalability of the Ariba solution," said Paul. "That's why we are currently extending the same Ariba solution to our operations in the Gulf of Mexico."
Infrastructure hardware, software and services for Petrocosm are expected to be provided by Hewlett-Packard Company.
Crosspoint Venture Partners is the leading venture capital firm in the B2B eCommerce market with over 40 current investments in this sector.
About Ariba, Inc.
Ariba, Inc. is the leading provider of business-to-business eCommerce services and solutions to leading companies around the world, including 15 of the Fortune 100. The company delivers an open, end-to-end, best-of-breed platform of interoperable solutions to manage corporate purchasing on the Internet, build net markets, and provide suppliers with buyer access and integration. Together, Ariba's software and services leverage the Internet-based Ariba Network to integrate the internal and external commerce processes of buyers, suppliers, net markets and commerce service providers. The result is a global eCommerce infrastructure that provides cost saving and revenue opportunities for businesses of all sizes. Ariba can be contacted in the U.S. at +1.650.930.6200 or at www.ariba.com.
About Chevron Corp.
Chevron, headquartered in San Francisco, California, is a leading energy and chemical company, operating in about 90 countries through its 500 subsidiaries, partnerships, affiliates, and other entities. Chevron employs about 31,000 people worldwide.
About Requisite Technology, Inc.
Requisite Technology, Inc., headquartered in Westminster, Colorado is the leading provider of electronic catalog technology and content management services to Global 2000 companies and electronic marketplaces. Requisite eContent Management solutions enable supplier participation and speed time-to-benefit for buyers, electronic marketplaces and suppliers.
Ariba is a registered trademark and Ariba Network is a trademark of Ariba, Inc. This press release contains forward-looking statements relating to the matters set forth herein that are based on current expectations, estimates and projections. Words such as "will," "expects," "intends," "plans," projects," "believes," "estimates" and similar expressions are used to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.
Among the factors that could cause actual results at Petrocosm to differ materially are: (i) Petrocosm was recently formed and is at an early stage of development; (ii) the level of participation of oil and gas companies in the Petrocosm Marketplace; (iii) the company's success in attracting a management team; (iv) the effectiveness of the company's Internet-based eCommerce platform; (v) the company's ability to implement its business plan; (vi) factors and risks which adversely affect key participants in Petrocosm; and (vii) the attractiveness and the offerings of other competitors in this market. In addition, Petrocosm could be affected by general domestic and international economic and political conditions.
Numerous factors and risks could adversely affect Ariba. Some of the factors and risks associated with Ariba's business are discussed in its registration statement on Form S-1 declared effective by the Securities and Exchange Commission ("SEC") on June 22, 1999, its Annual Report on Form 10-K for the year ended September 30, 1999 filed with the SEC and in the other reports filed by it from time to time with the SEC.
TEXACO JOINS GLOBAL INTERNET MARKETPLACE, PETROCOSM, AS A FOUNDING MEMBER; HALLIBURTON EXECUTIVE NAMED CEO
HOUSTON, March 23, 2000 -- Petrocosm Corp. today announced that Texaco Inc. has joined Petrocosm marketplace as a founding member of the first, global Internet marketplace created and owned by the energy industry.
Petrocosm also announced the appointment of Norman C. Chambers, currently senior vice president of Halliburton Company, as its chief executive officer. The appointment is effective April 3.
The Petrocosm marketplace, first announced Jan. 19, will launch in the second quarter at www.petrocosm.com. It will offer an open marketplace for companies of all sizes to buy and sell products and services that span the petroleum industry supply chain: drilling equipment, electrical supplies, pipes, valves and fittings, as well as professional, engineering and construction services. Companies in the energy industry will be able to leverage this Internet marketplace to achieve cost savings and generate new revenue streams, ultimately gaining a competitive advantage.
"Our equity participation in the Petrocosm marketplace is a highlight in Texaco's growing portfolio of strategic e-business alliances," said Gregory M. Vesey, vice president, E-Business for Texaco. "We're very excited to join this venture as it finalizes preparations to go live."
Vesey continued, "The new business model behind Petrocosm will transform the traditional customer/supplier relationship by creating a limitless marketplace that can be easily accessed by both the largest and smallest companies around the globe. This open, independent model will provide significant opportunities for cost savings and increased market efficiencies for buyers and sellers - key objectives in Texaco's e-business strategy."
"Ever since the creation of Petrocosm marketplace two months ago, we've seen tremendous interest from players in every part of the energy supply chain," said new Petrocosm CEO Norman Chambers. "We're very pleased to welcome Texaco as a founding partner with Chevron, Ariba and Crosspoint Venture Partners."
"We look forward to working with Texaco and value their early recognition and understanding of the rewards this marketplace can bring to the energy industry."
Chambers, 51, previously served as president of Halliburton Energy Development, which integrated the development and production of oil and gas fields in partnership with Halliburton's customers. With more than 25 years experience in the upstream and midstream of the oil and gas industry, Chambers has been involved with technology teams at Halliburton and Brown & Root and held a number of operational and senior management positions.
Chambers was graduated from Springfield College in 1971 with a bachelor of arts degree. In 1982, he was graduated with distinction from Boston College with a master of business administration degree. He also has attended the Tufts University Fletcher School of Law and Diplomacy and Harvard Business School.
Petrocosm will be headquartered in Houston, Texas. Interested parties can obtain more information by dialing 1+(877) 627-9796.
Updated: January 2000