AGIPPETROLI-ANONIMA PETROLI ITALIANA-ESSO ITALIANA/PETROVEN
PRESS RELEASE
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PRESS RELEASE
The Authority is investigating the petroleum products logistics sector
The authority has resolved to commence investigations into AgipPetroli, Esso and API, to ascertain whether the agreement they have concluded for the incorporation of the joint venture company, Petroven, that was notified to the Authority in March this year, might be intended to, or have the effect of, substantially restricting competition on the petroleum market. The investigation will also enable the authority to see whether the conditions exist to grant an exemption to the prohibition on agreements restricting competition under section 2 of the Italian Competition Act, Law no. 287/90.
The joint venture company, Petroven, will jointly manage the logistical infrastructures and facilities belonging to AgipPetroli, Esso and API at Porto Marghera, and will provide service for transporting and storing finished petroleum products for the network, non-network and bunkering services in the hinterland, comprising the regions of Veneto, Friuli Venezia Julia, and Trentino Alto Adige.
Petroven is being incorporated at a time in which all the oil companies are deciding on co-operation ventures in the logistical sector, not only to rationalize the infrastructure facilities and reduce storage over-capacity, but also in response to the pressure from local government authorities on environmental grounds.
The Petroven agreement could nevertheless have significant effects on competition on the finished petroleum products distribution market. One particular effect might be that it would enable the parent companies to co-ordinate their conduct on the aforementioned markets, and probably raise a barrier to entry to current and potential competitors.
The effects of the agreement are all the more significant when one considers that the logistical systems forming the subject-matter of the agreement account for over 60% of the total available capacity of Porto Marghera, and supply between 55% and 65% of the petroleum products intended for the network in the Friuli Venezia Julia Provinces, between 40% and 60% of the products outside the network in these Provinces, and over 80% of the products used to supply bunkering services in the port at Venice.
Equally relevant to the Authority's decision is the fact that AgipPetroli, Esso and API are vertically integrated oil companies operating in Italy from the refining to the final distribution phase, and the fact that the first two control two-thirds of the vehicle fuel network distribution market.
Rome, 5/7/1999