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. Last Updated: 07/27/2016

BP Amoco To Purchase Mobil Units

LONDON -- BP Amoco PLC said Tuesday that it has agreed to pay $1.5 billion for Mobil Corp.'s share in their joint European fuels business, in response to regulators' conditional approval of Mobil's merger with Exxon Corp.

At the same time, BP Amoco is assessing its future in Russia, where it is seeking to recover its investment in a bankrupt Russian oil company after writing off $200 million.

Under an agreement announced Tuesday, BP Amoco will take control of 8,500 European filling stations along with fuel pipelines serving London's Gatwick Airport.

In addition, BP Amoco and Mobil will divide their lubricants business in line with their equity stakes - 51 percent for Mobil, 49 percent for BP Amoco.

The decision to dissolve their partnership followed regulatory approval of Exxon's $81 billion merger with Mobil - a deal approved last month by U.S. authorities that created the world's largest publicly traded oil company.

The European Commission, the administrative arm of the European Union, approved the merger but with conditions.

BP Amoco and Mobil formed their joint venture in 1996. Their fuels business, operated by BP Amoco, has a 12 percent share of the regional market. The lubricants business, which Exxon Mobil operates, has an 18 percent market share.

If approved, the deal dissolving the joint venture will give BP Amoco control of the filling stations and refineries in Britain, the Netherlands, France and Spain.

Exxon Mobil will get much of the lubricants business, including a refinery in France and blending plants in Belgium, Turkey and Greece.

The companies said in a joint statement that the dissolution of their venture would not have "a significant direct impact'' on employment levels. They plan to sever ties at the start of 2000.

BP Amoco will not immediately be seeking a partner to replace Mobil, a spokeswoman for the British firm said.

Amid signs of a less amicable divorce, BP Amoco said Tuesday it is weighing all its options after losses on its investment in a bankrupt Russian oil company, Sidanko.

A Sidanko subsidiary, the Chernogorneft oil field in western Siberia, was sold to Tyumen Oil Co. last month for $178 million - a price BP Amoco insists is just a fraction of Chernogorneft's true value.