European Giants Wont Succumb To Merger Mania

The proposed $10 billion tie-up between Shell Oil and Texaco comes hot on the heels of a deal worth $5 billion to merge the European refining and retail sectors of British Petroleum and Mobil.

But industry-watchers believe that the European operations of BP and Mobil are a rare strategic fit.

would be surprised to see another mega merger of two giants on that scale, said Mathieu Zajdela, head of studies at Paris-based energy consultants Ener-finance.

Indeed, at the announcement of the BP/Mobil merger, BP chief executive John Browne said that the two companies operations were uniquely complementary.

The profitability of Europes oil sector is at an all-time low as dwindling retail margins in major markets combine with already-weak refining margins.