Mergers Between Independent U.S. Oil Companies.

Mergers also took place between independent oil companies in 1998 on American soil : Kerr-McGee and Oryx Energy signed a merger agreement with share exchange estimated at 4billion $, thus giving birth to the fourth independent oil group, Kerr-McGee Corporation, the merger becoming effective in 1999. Seagull Energy bought out Ocean Energy for 1.1 billion $, thus creating the tenth independent oil company in the United States.

In the field of refining-distribution, Phillips has sold almost all of its activities to Ultramar Diamond Shamrock (UDS) : this has led to the creation of "Diamond 66", 55 % being held by UDS and 45 % by Phillips, which comprises all of the refining, distribution and transportation activities of Phillips and Ultramar in the United States. Diamond thus holds the position of the biggest independent refining, distribution and transportation company in North America. In 1999, by means of a takeover bid, BP-Amoco bought Atlantic Richfield (Arco) for 26.6 billion dollars. This merger was approved by the shareholders. The new entity can pride itself on a capitalization of 185 billion dollars - more than Royal Dutch-Shell-, a turnover of 80 billion dollars and oil reserves of 13 billion barrels. The two companies work together on the greatest petroleum resources in North America, at Prudhoe Bay in Alaska.

In April 1999, the shareholders of Santa Fe Energy Resources and of Snyder Oil approved a merger project between these two companies whose regrouping was effective at the end of September. Still in April 1999, transactions were carried out between three Korean companies: Hyundai Oil Refinery acquired a 38.82 % stake in Hanwha Energy and took over all of the refining sector of Hanwha Energy Co. Ltd.

Still in April, the Spanish group Repsol made a 13.4 billion dollar bid for the Argentinian company Yacimientos Petroleos Fiscales (YPF) to acquire the rest of its capital, i.e. 85.0 %. In May, the Argentinian oil company approved the takeover bid launched by Repsol. In terms of hydrocarbon resources, the new entity is the 8th largest company in the world, the 9th in terms of production.

                       Main operational indicators in 1998

                          Reserves       Production      Refining capacity
                          (Gboe)          (Mboe/d)            (Mb/d)

Exxon-Mobil                 21.3            4.30                5.7
Shell                       20.1            3.70                4.6
BP-Amoco-Arco               19.5            4.10                3.4
Chevron                      6.4            1.50                1.5
Total + Petrofina + Elf      9.3            2.14                2.4
ENI (1997)                   5.1            1.02                1.1
Texaco                       4.5            1.30                1.3
YPF + Repsol                 4.1            0.98                1.2

Source : annual reports

YPF and Repsol seem to have complementary activities: the Spanish group has traditionally focussed its activities on refining-distribution, whereas the Argentinian company owns 2.3 and 5.2 times as many petroleum and gas reserves respectively as Repsol.

In May 1999, Norsk Hydro launched a takeover bid of 2.1 billion euros against the private Norwegian company Saga Petroleum. In a parallel step, the French group Elf Aquitaine had made a bid for Saga with an 8 % overbid in relation to Norsk Hydro's offer. In June 1999, Saga's shareholders eventually accepted Norsk Hydro's bid that had been revised upwards, thanks to the support of the third Norwegian oil company, Statoil, and of the authorities of the country.

On 5 July, TotalFina announced a public offer of exchange for Elf. Later, Elf launched a counter-offer of exchange for TotalFina. TotalFina and Elf eventually merged by mutual agreement. The boards of directors of both companies approved the merger on 13 September. TotalFina's last bid valued Elf at 52 billion euros. The merger gives birth to the fourth largest oil company in the world, that will have a market capitalization of 100 million euros.

After the merger project with Texaco failed last May, Chevron is reported to be negotiating for the takeover of Phillips Petroleum. This acquisition, for the sum of 16.2 billion dollars, would create a group whose value is estimated at 81 billion dollars. Finally, on 27 September, the American oil company Chevron announced the acquisition of Petrolera Argentina San Jorge, an oil and gas production and exploration company in Argentina.