BP TO ACQUIRE SPANISH REFINER/MARKETER

June 17, 1991

British Petroleum Co. plc is making a $450 million bid to become a major force in Spain's expanding downstream sector. BP has agreed in principle to acquire 24.9% of Petromed SA, the third largest refiner and marketer in Spain, from La Corp. Industrial y Financiera de Banesto SA (LCB). Toward the end of this month BP will make a public offering for the remaining 75.1% of shares in Petromed, including 20.1% which will still be held by LCB and not included in the initial agreement with BP. BP

British Petroleum Co. plc is making a $450 million bid to become a major force in Spain's expanding downstream sector.

BP has agreed in principle to acquire 24.9% of Petromed SA, the third largest refiner and marketer in Spain, from La Corp. Industrial y Financiera de Banesto SA (LCB).

Toward the end of this month BP will make a public offering for the remaining 75.1% of shares in Petromed, including 20.1% which will still be held by LCB and not included in the initial agreement with BP.

BP said its offer to LCB and public shareholders valued the company about $450 million.

Spain is Europe's fastest growing market for oil products with demand last year increasing by about 6.5%.

It is the one European market that provides potential for expansion because the government is in the process of breaking up the former state oil products distribution monopoly. That's one of the conditions of Spain's entry into the European Community.

Campsa, the former monopoly distribution company, is being dismantled and its operations divided among its shareholders, including Petromed which has about 7%.

BP has a joint venture with Petromed-BPMed-that has built nine gasoline service stations.

With the stations acquired from Campsa, BP will have a total of 330 outlets and 9% of the market. That will make BP the third largest marketer in Spain behind Repsol SA with 56% and 26% for Cepsa, where Ste. Nationale Elf Acquitaine is seeking to raise its 20% share in the company to 35%.

In addition to the Campsa holding, Petromed owns and operates a 120,000 b/d refinery at Castellon de la Plana near Valencia. It also has a small chemical operation through Proquimed and a portfolio in a number of Spanish industrial holdings worth about $214 million.