Hydrocarbon Processing - August 2022 - 46

History of the HPI
in the region. Their work led to Directive
70/220/EEC in 1970, which was the
impetus to setting emissions standards
for light- and heavy-duty vehicles in Europe
(this research was detailed in the
History of the HPI section of the June
issue).145
This directive eventually led to
the introduction of the Euro 1 standard in
1992 (implemented for passenger cars in
1993), the removal of leaded petrol from
filling stations in Europe and the adoption
of three-way catalytic converters.144,146,147
The Euro 1 standard was replaced by
Euro 2 in 1996, which reduced sulfur limits
in diesel from 2,000 ppm to 500 ppm;
Euro 3, introduced in 1999 and implemented
in 2000, further reduced sulfur
content in diesel to 350 ppm and gasoline
to 150 ppm. Subsequent standards (i.e.,
Euro 4-6 and Euro I-IV) would continuously
reduce sulfur content in transportation
fuels to near-zero levels.
The implementation of European
emissions standards in the early 1990s
would eventually become a global standard
for many countries around the
world to adhere to new clean fuels regulations.
For example, more than a dozen
Asian nations started using European
emissions and fuel quality standards in
the late 1990s/early 2000s. Many still use
these standards as a benchmark for sulfur
content in transportation fuels. The same
initiatives apply in other regions, such as
Africa, Central and South America, and
the Middle East.231
These new sulfur cap limits in transportation
fuels have had significant impacts
on refiners globally. To produce
fuels that adhere to these standards (e.g.,
Tier 3 in the U.S., Euro 6/VI in Europe
and other parts of the world), refiners
must invest a significant amount of
capital in new secondary units. Since the
adoption of emissions and sulfur content
standards in the U.S., Europe and other
nations, tens of millions of barrels per
day in new secondary unit capacity have
been built at a cost of hundreds of billions
of dollars.
Consolidation in the oil industry:
Mergers and acquisitions that created
mega-companies. The 1990s
witnessed several significant mergers and
acquisitions that created some of the largest
integrated companies in the world.
Combined, these deals exceeded $220 B
and included the following:
46 AUGUST 2022 | HydrocarbonProcessing.com
* bp and Amoco: In 1998, bp
merged with Amoco in a more
than $48-B deal, which was the
largest industrial merger ever up to
that point in time.232
The merging
of the two companies created
an energy conglomerate with a
market capitalization of $110 B.
The deal was complementary for
both sides. bp, through Amoco,
strengthened its refining and
chemicals production and products
marketing-Lord Brown (bp's
chief executive 1995-2007)
said that through the merger, bp
gained 9,300 fuel stations and five
refineries that produced a total of
1 MMbpd.233
By merging with bp,
Amoco gained a foothold on the
international market, a weak spot
for the company at the time.
* bp Amoco and ARCO: Not even
1 yr after bp and Amoco merged,
bp Amoco acquired the Atlantic
Richfield Co. (ARCO) for $27
B. The acquisition significantly
increased bp Amoco's foothold
in Alaska's North Slope (U.S.)
oil exploration and production
operations, as well as captured
20% of California's (U.S.) fuels
retail market-at the time, ARCO
owned approximately 1,200 fuel
service stations in the state.234
* Total and Petrofina: In 1998,
Total acquired Belgian oil company
Petrofina for $12 B. The deal
created the third-largest company
(TotalFina) in Europe, and the
sixth-largest company in the world.
The acquisition helped Total gain
a more international foothold,
increased the company's refining
and products marketing operations,
and provided the new organization
(TotalFina) with a market
capitalization of nearly $40 B.235
* TotalFina and Elf Aquitaine:
Approximately 8 mos after
acquiring Petrofina, TotalFina
acquired Elf Aquitaine (Elf) for
approximately $54 B.236
At the
time, Elf was a major integrated oil
and gas company and one of the
largest petrochemical companies
in the world. TotalFina not only
gained sizable exploration and
production operations in West
Africa and the North Sea from Elf,
but also its petrochemicals and
chemicals production capacity,
five refineries and Elf's 6,500 fuel
stations throughout Europe and
West Africa.237
After the merger
was completed, TotalFina Elf
became the world's fourth-largest
company.237
* Exxon and Mobil: In 1998,
Exxon announced an $81-B deal
to merge with Mobil, which would
create the third-largest company
in the world behind General
Electric and Microsoft.238
The
U.S. Federal Trade Commission
(FTC) unanimously approved the
merger in late 1999 dependent on
the two organizations agreement
to divest a sizable amount of assets.
For example, the FTC ordered
the two companies to sell more
than 2,400 fueling stations in the
northeast U.S., California and
Texas; Exxon had to sell its refinery
in Benicia, California, and agreed
to stop selling gasoline and diesel
fuel under the Exxon name in the
state for 12 yr; and other assets.
These demands from the FTC
were the largest divesture ever
asked by the commission up to
that time.239
The merger not only
created a mega-company with
a market capitalization value of
nearly $240 B, but also reassembled
two pieces of John D. Rockefeller's
Standard Oil empire that was
broken up in 1911.
* Shell and Texaco: In 1997-1998,
Shell and Texaco agreed to a partial
merger of downstream operations
and fuel stations in the west and
Midwest portions of the U.S. The
JV, Equilon Enterprises, operated
eight refineries, 10 lubricant plants,
more than 70 oil and product
terminals, and more than 11,200
fueling stations and convenience
stores.240
Equilon soon joined Saudi
Refining (now Saudi Aramco) to
create Motiva Enterprises, which
eventually would operate one of the
largest refineries in the world, the
630,000-bpd Port Arthur refinery
in Port Arthur, Texas (U.S.). Shell
would eventually retain all Equilon
Enterprises and Texaco's share in
Motiva to pave the way for Chevron
and Texaco's $39-B merger in 2001.
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