press release

Texaco Press Release - Proposed Chevron Texaco Merger Clears Regulatory Hurdle in Europe

The following Press Release was issued by the European Commission.

COMMISSION CLEARS MERGER BETWEEN CHEVRON AND TEXACO

FOR RELEASE: THURSDAY, MARCH 1, 2001

Brussels, Mar. 1 - The European Commission has approved the merger between U.S. oil companies Chevron Corp and Texaco Inc. Although the operation will create the world's fourth largest company in oil and gas production, the number of areas where the companies' activities overlap in Europe are limited and, where they do, the combined market shares remain below 15%.

Chevron and Texaco are both fully integrated oil companies. The limited overlap between the companies reflects Chevron's focus on its operations outside the European Economic Area (the 15 European Union states plus Norway, Iceland and Liechtenstein). Chevron has decided to concentrate its marketing activities in the United States and gradually disposed of its downstream European businesses. Most of its operations were sold to Texaco (1984), with the remainder to Shell (1997) and Petroplus (1998).

The only affected markets result from Chevron's 20% to 30% market share for lubricant additives through its Oronite subsidiary. Texaco is not active in these markets but is present in the downstream finished lubricants market where it has a 5-10% share of all lubricants sales on an EEA scale. But as Chevron's sales on this market are small and lubricant producers multi-source their additives requirements in order to profit from technological improvement, the Commission considered that the new entity's position in the lubricant additives market would not give rise to a foreclosure or other anti-competitive effects in the market(s) for finished lubricants. The Commission also noted that the additives supply market is characterised by four equally strong competitors (Lubrizol, Infineum, Ethyl and Oronite).

For these reasons the Commission has decided not to oppose this operation and to declare it compatible with the common market and with the EEA Agreement.

Updated: March 2001