press release

Leading energy and petrochemical companies to launch global procurement exchange

The following news release was issued on behalf of the founding partners: Royal Dutch/Shell, BP Amoco, Conoco, Dow Chemical, Equilon Enterprises, Mitsubishi Corporation, Motiva Enterprises, Occidental Petroleum, Phillips Petroleum, Repsol YPF, Statoil, Tosco, TotalFinaElf and Unocal

LONDON, April 11, 2000 -- A group of 14 leading energy and petrochemical companies from across the world-wide industry today announced they will launch an independent industry procurement exchange. Discussions are already underway with further important partners and participants, including members from the supplier community.

The exchange will provide a global electronic marketplace open to buyers and sellers both large and small. In addition, the exchange will develop technologies to remove inefficiencies in procurement, supply chain management and capacity utilization. The founding partners will work together to make the exchange attractive for all companies across the industry to use.

The scope of the exchange will initially include all procurement activities related to goods and services used within the oil and gas exploration and production business and the petrochemicals, refining, marketing and retail sectors of the industry.

Sir John Browne, BP Amoco's Group Chief Executive, said: "The leading players within the industry have come together to improve performance, productivity and capital efficiency. Exchanges are a very exciting example of the application of internet technologies to drive efficiency and innovation across the supply chain."

Harry Roels, a Royal Dutch/Shell Group Managing Director, said: "Shell attaches great importance to eBusiness and so is delighted to play a leading role in the formation of this global exchange. By working together with industry partners and suppliers, we can deliver greater savings in a shorter time."

The collective annual procurement spend of the founding partners exceeds $125 billion: 40% of this spend is in North and South America, 40% in Europe and Africa and 20% in Asia Pacific and the Middle East. The partners plan to use the exchange for a significant amount of their procurement.

An independent company will be created to own and operate the exchange. Initially at least three-quarters of the equity in the new company will be owned by the energy and petrochemical companies. The remainder will be allocated to staff and technology providers.

It is intended to prepare the company for initial public offering (IPO) in the future.

The exchange will be launched using the CommerceOne Marketsite platform. Other technology providers will be selected by the exchange to ensure sufficient flexibility to meet the needs of the industry.

Morgan Stanley Dean Witter has advised in the formation of the exchange.

Updated: April 2000