Unocal invests in NetworkOil; decision fueled by energy industry commitment to e-commerce
The following news release was issued by NetworkOil, Inc.
HOUSTON--March 8, 2000--NetworkOil, Inc., a global Internet marketplace for petroleum equipment and services, today announced an investment from Unocal Corporation, a leading global energy company.
Unocal joins more than 30 oil and gas companies already invested in the NetworkOil marketplace and over 170 oil and gas companies registered to use NetworkOil.
Unocal spends between $1.0 and $1.2 billion annually on oilfield goods and services. The addition of Unocal raises the total potential expenditure representation on the NetworkOil marketplace to nearly $10 billion, greater than all but three of the largest multinational oil companies.(1)
"Unocal's move to participate in an e-commerce marketplace clearly supports our core business objectives," said Roger C. Beach, Unocal chairman and chief executive officer. Beach went on to say that Unocal is very aware of the potential impact of e-commerce in the energy business, specifically to enhance worldwide procurement efforts.
"A large portion of our annual capital and expense budget is spent on goods and services provided by our suppliers and contractors. Cost reduction and efficiency improvements in this area can quickly affect our bottom line," Beach said.
Beach added that NetworkOil was an attractive investment for Unocal because it is an energy industry-focused marketplace that has already attracted a large number of buyers and suppliers.
Unocal is acquiring a minority stake in NetworkOil's e-business, in keeping with the neutral forum that NetworkOil actively seeks to maintain. No single entity or set of companies holds a significant position in the NetworkOil marketplace, benefiting both buyers and sellers. To date, more than 230 service and equipment companies and 170 oil and gas companies have registered to use the NetworkOil marketplace.
Other oil and gas companies holding equity interests in NetworkOil include Burlington Resources, EOG Resources and Ocean Energy. Earlier this week, NetworkOil announced the completion of a $35 million venture capital financing from Morgan Stanley Dean Witter Private Equity, Goldman Sachs and Warburg Pincus Ventures.
"We are delighted that Unocal has come on board and look forward to receiving their feedback as we develop enhancements that further enable and streamline petroleum procurement and supporting business processes," said Steve Martin, NetworkOil's chief executive officer. "Their participation validates our approach to building a liquid and neutral marketplace."
Unocal is a leading global oil and gas exploration and production company with significant pipeline and power plant project developments worldwide. For more information about the company, visit Unocal's web site at www.unocal.com.
Headquartered in Houston, NetworkOil is the premier, global Internet marketplace for petroleum services and new and used equipment. The electronic exchange provides a secure, neutral forum for conducting a variety of transactions, including requests for bid, auctions and reverse auctions. The NetworkOil management team and investor group is drawn from the oil and gas, e-commerce, technology and financial industries. NetworkOil is headquartered in Houston with regional offices in San Antonio, Midland, Denver, Lafayette, Oklahoma City, Bakersfield, Traverse City and Calgary. More information is available at www.networkoil.com.
Updated: March 2000