RWE-DEA and Deutsche Shell: a petroleum pool
28 Mar 2001
RWE-DEA Aktiengesellschaft für Mineraloel und Chemie and Deutsche Shell GmbH, both based in Hamburg, have agreed to combine their downstream activities in Germany into a new joint venture company under the name of Shell & DEA Oil GmbH.
Both companies will contribute their downstream activities to the new joint venture, in which each company will have a 50% stake. In 2004, Shell will have the opportunity to acquire a majority interest of 51 %. RWE-DEA will be able to sell its stake to Shell in 2003/4. The co-operative venture is subject to approval by the responsible antitrust authorities.
Petroleum downstream business in Germany and the entire region of western and northern Europe is a mature market under extreme competitive pressure. Prices paid by German final consumers are among the lowest in the whole of Europe.
The planned joint venture planned provides an opportunity for the companies to make annual savings of approximately DM 300 million.
With a crude oil refining capacity of 34.3 million tons annually, the joint venture will become Germany's largest crude oil refiner. And with some 3,200 stations, it will also be the leading service station company in the German market, according to RWE-DEA.
Including its subsidiaries, the joint venture company will have about 7,500 employees. A gradual reduction of about 750 jobs is expected as a result of the agreement, in marketing and sales, administration and production.
