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US giant eyes oily hub buyout

US oil giant Chevron has confirmed it is looking to buy PetroCosm, the online public marketplace it founded last year with industry rival Texaco.
Written by Sonya Rabbitte, Contributor

US oil giant Chevron has confirmed it is looking to buy PetroCosm, the online public marketplace it founded last year with industry rival Texaco.

A successful buy out could leave Chevron with a powerful private marketplace, especially as it waits on approval from the US federal trade commission on a $100bn merger with Texaco. Chevron and Texaco announced their intended merger last October, with both companies hoping to complete the deal this summer. Chevron joined forces with Ariba early last year to found PetroCosm as a consortium-owned marketplace for the gas and oil industries. Texaco later came on board. Other exchange members include US-based National Oilwell and Brazilian oil company Petrobras. Consortium members are also currently working with Petrobras to set up a subsidiary exchange in Brazil. The US headquarters of Chevron and PetroCosm have confirmed that buyout talks are taking place, but no further details have been released. Andy Kite, research analyst with the Gartner Group suggests Chevron's intended buyout is a damage limitation exercise, as the shareholders it brought on board see the value of their investment drop. He said: "They've got an organisation they've created that doesn't offer value any more. They can take that technology and infrastructure and salvage some value through a private marketplace." While Kite says it is too early to talk about competition between marketplaces, PetroCosm has always lagged behind Shell's B2B offering, trade-ranger.com, in terms of the heavyweights it has tempted onboard. Trade-ranger counts BPAmaco, Elf, Mitusbishi and Statoil among its ranks. Andy Bartells, analyst with the Meta Group, said: "The big oil companies have been very sceptical about PetroCosm since its beginning. It was always seen as a Chevron initiative, Trade-ranger was formed as more of a co-operative. "The Texaco and Chevron merger talks have definitely taken away the idea that it is neutral."
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