Oil giants team up to buy on the net

Last week 14 of the world’s leading petrochemical and energy companies leant support to a radical shake-up of traditional trading methods with the set-up of an industry specific e-procurement exchange.

BP Amoco believes the global project is set to slash as much as $37.5bn from an estimated $125bn channelled into purchasing costs by the founding partners.’We can look at making savings from 5% to 30% on our transaction costs on anything from purchasing paper clips to oil rigs in the North Sea’, said a BP Amoco spokesman.

Prime movers BP and Royal Dutch/Shell only began this January to peddle the e-commerce idea among industry colleagues, following similar moves in the automotive and aerospace industry.

Technology will initially be supplied by e-business market leaders CommerceOne, who already provide automotive giant General Motors with an online exchange, GM TradeXchange, for its partners and suppliers.

An independent company will be created to own and operate the exchange – with 75% of equity owned by the energy and oil companies, with staff and technology providers allocated the rest.

Consortium members include Conoco, Dow Chemical, Equilon Enterprises, Misubishi Corporation, Motiva Enterprises, Occidental Petroleum, Phillips Petroleum, Repsol-YPF, Statoil, Tosco Corporation, TotalFinaElf and Unocal.

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