Brussels, 24/08/2001 (Agence Europe) - On Thursday, the European Commission decided to refer to the German Competition Authority the examination of the impact of a proposed joint venture between Deutsche Shell and RWE-DEA on the downstream oil products market. The authorities have four months in which to take a final decision. At the same time, the Commission is opening an inquiry in order to make an indepth analysis of the impact such an operation would have on the petrochemicals sector. In accordance with the agreement notified to the Commission on 10 July 2001, Shell and DEA hope to pool their downstream activities in the oil and petrochemicals products sectors within a joint venture. The undertaking would not include the parent companies' upstream activities in the oil or natural gas sectors. The agreement also foresees that Shell will take sole control of DEA form 1 July 2004 at the latest.
With regard to the request for referral, the Commission considers that the German Competition Authority (Bundeskartellamt) is in a better position to assess the impact of the operation on competition on the oil products market in Germany, in so far as the analysis would require an inquiry into the local sub-markets as well as into relations at supply level, mainly in service stations. In addition, the Bundeskartellamt recently completed an inquiry into alleged abusive pricing practices by the major oil companies in Germany, "which gives it considerable expertise of the sector", writes the Commission. On 3 August 2001, the German Competition Authority asked the Commission to refer part of the examination to it, in application of Article 9 of the regulation on concentrations. The article in question allows such referral to take place when a merger concentration threatens to create or strengthen a dominant position that could result in significantly hampering effective competition in a market within the Member State concerned. The Bundeskartellamt insists that the proposed merger did threaten to create or strengthen a dominant position on the retail sales market of automobile fuel and on several other oil products markets. In the German authorities' analysis, account is taken of the merger envisaged of BP and E.ON (Veba and Aral brandnames) on the downstream oil and petrochemicals markets, a separate German operation that was also notified to the Commission on 27 July 2001. The Bundeskartellamt reached the preliminary conclusion that the operation did indeed threaten to create a situation in which the new entity would, with BP/Veba/Aral and the other major oil companies, hold a collective dominant position, mainly on the ethylene supply market via the pipeline network called "ARG". This pipeline network and its extensions link various production sites, sea terminals and ethylene consumers in Belgium, the Netherlands and Western Germany. Both merged entities will control the biggest part of the market and of the underlying infrastructure, consisting of steam cracking equipment, the core "ARG" pipeline network and its extensions as well as connected sea terminals. In addition, the operation will eliminate the only downstream non-integrated ethylene producers from the market. The Commission also has a total of four months in which to reach a final decision on these aspects of the operation.
The Anglo-Dutch group Royal Dutch/Shell (Shell) is one of the largest oil groups worldwide. It operates in the exploration, production and sale of oil and natural gas, the production and sale of refined products chemicals, power generation and the production of energy from renewable resources. In Germany, Shell is active through its wholly-owned subsidiary Deutsche Shell GmbH. DEA Mineralöl is a 100% subsidiary of RWE AG, the parent of a group of so-called multi-utility companies ranging from energy, water distribution and treatment and environmental services, as well as mining, petroleum and chemicals.