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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549-1004
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):February 29, 1996
MOBIL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-7555 13-2850309
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
3225 Gallows Road
Fairfax, Virginia 22037-0001
Telephone: (703) 846-3000
(Address of principal executive offices)
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Item 5. Other Events
The Registrant hereby incorporates by reference herein the
information set forth in its News Release dated February 29, 1996,
a copy of which is annexed hereto as exhibit 99.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits.
99. Mobil Corporation News Release dated February 29,
1996 which announced that BP and Mobil will
combine their European operations in the refining
and marketing of fuels and lubricants.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
REGISTRANT MOBIL CORPORATION
By /s/ Gordon G. Garney
NAME AND TITLE Gordon G. Garney, Senior Assistant Secretary
DATE February 29, 1996
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EXHIBIT INDEX
EXHIBIT SUBMISSION MEDIA
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99. Mobil Corporation, Electronic
News Release dated
February 29, 1996
BP AND MOBIL TO COMBINE DOWNSTREAM IN EUROPE
LONDON, ENGLAND, Feb. 29 -- In a move which would give them a
prime market position across much of Europe and joint annual
pre-tax cost savings of (USD)400-500 million, BP and Mobil have
agreed in principle to combine their European operations in the
refining and marketing of fuels and lubricants.
The two companies announced today that, subject to European
Commission and other approvals, they plan to pool assets with a
book value of some (USD)5 billion - (USD)3.4 billion from BP and
(USD)1.6 billion from Mobil - to create a pan-European joint
venture with net annual sales of more than (USD)20 billion.
The new venture would be a highly competitive business with
12 percent of the fuels market and the largest supplier of
lubricants with an 18 percent share of the European market.
In a joint statement, BP Chief Executive John Browne and
Mobil Chairman and Chief Executive Officer Lucio A. Noto
described the move as "a very significant strategic step which
would take the combined business into the top tier of European
refining and marketing, and enhance its position in numerous
national markets and product sectors."
They said: "The European downstream operations of our two
companies are uniquely complementary. Bringing them together
will produce efficiencies through sharing costs, eliminating
duplication and achieving major economies of scale.
"It will provide us with a distinctive asset base that offers
a superior range of products and services and will have strong
potential for future profit growth. It will be good for our
customers and good for our shareholders."
Under the terms of the agreement, the companies will
establish a joint venture with operating partnerships for fuels
and for lubricants in each of the countries where the companies
are already active or may develop future business. The 43
countries covered by the agreement include the 15 European Union
nations, together with Switzerland, Turkey, Cyprus, all of
Eastern Europe and Russia west of the Urals.
BP and Mobil have agreed that their existing downstream
assets in each country will be operated by the local
partnerships. These assets will include the refineries, depots
and retail sites of both companies, together with pipelines,
tankage, terminals, road tanker fleets and all other systems,
plant and equipment associated with the manufacture and
distribution of oil products in Europe.
Cash flow will be shared by the companies in line with their
interests in each partnership.
BP will operate and have a 70 percent interest in the fuels
partnerships. The fuels partnerships will run the refining and
manufacturing activities of both companies, together with their
commercial and retail networks, including some 5,600 BP and 3,300
Mobil service stations. All retail sites will be branded in BP
green, will carry Mobil lubricants and signage and will feature
the joint venture mark.
Mobil will operate and have a 51 percent interest in the
lubricants partnerships. Mobil will manage both brands of
lubricants, will market lubricants and special products and will
run the blending plants. Over time, conversion of some BP
products to the Mobil brand is expected. Mobil and BP lubricants
will be promoted in all the service stations of the joint
venture.
The companies said both the fuels and lubricants businesses
in each country would be run by combined offices and management
teams. Other service departments, such as information
technology, human resources, legal, accounting and office
management, would also merge.
Commercial and financial strategy for the joint venture will
be coordinated by a supervisory committee with an equal number of
representatives from each company.
Under the partnership arrangements, lubricants employees in
BP will transfer to Mobil and fuels and services employees in
Mobil will move to BP. The companies said that, while they have
yet to complete detailed studies in each country, they
anticipated a loss of 2,000-3,000 jobs from their combined
non-service station workforce of 17,500.
The annual savings of (USD)400-500 million are expected to be
realized within three years. The expected one-off costs before
tax over the next two years to cover restructuring, rebranding
and associated items, will be approximately (USD)400 million, to
be shared by the companies in line with their interests in the
venture.
The joint venture excludes the downstream operations of both
companies which have activities in Europe but operate globally,
such as international trading, aviation, marine, shipping and gas
marketing. It also excludes exploration and production and
chemicals.
Background Notes For Editors:
BP is a major petroleum and petrochemicals group with operations in some 70
countries, some 56,000 employees and annual sales and operating revenues of
$79 billion.
In Europe, it operates downstream in 18 countries where it sells around
825,000 barrels of oil products a day. It has some 5,600 European retail
sites and a market share in both fuels and lubricants of 8 per cent.
It currently owns or has interests in eight European refineries with
a combined capacity of 760,000 barrels a day although it recently
announced plans to sell its Lavera refinery in the south of France which
would bring its capacity down to 575,000 barrels a day. In European
downstream operations employ approximately 15,500 people, of which 4,000
are service station staff.
Mobil is a major international energy company operating in over 100
countries with over 50,000 employees and annual revenues of over $73 billion.
In Europe, Mobil has downstream operations in 22 countries where it sells
550,000 barrels of oil products a day. It has some 3,300 service stations
and market shares of four per cent in fuels and 10 per cent in lubricants.
It currently owns or has interest in six European refineries with a capacity
of 350,000 barrels a day. The company's European downstream operations
employ approximately 8,000 people of which 2,000 are service station
employees.
In the face of surplus capacity and recent poor refining returns across
the industry, BP and Mobil have each been pursuing a similarly agressive
refining strategy to rationalize and upgrade their operations. Mobil
last year closed its Woerth refinery in Germany. In addition to the sale
of Lavera, BP recently disclosed plans to close the Pernis section of the
Nerefco refinery in Rotterdam and upgrade the adjacent European site.
February 29, 1996
