THE WALL STREET JOURNAL: EU To Allow Spain To Vet Shell, Cepsa Air Refuel Venture: “In a statement, European regulators said their initial probe had uncovered potential problems with the venture because it "may threaten competition." (ShellNews.net) 24 Nov 04

DOW JONES NEWSWIRES

November 24, 2004

BRUSSELS -- European regulators Wednesday decided to allow Spanish antitrust authorities to judge a joint venture for aircraft refueling between Royal Dutch Petroleum Co.'s (RD) Spanish subsidiary and Spanish oil company Compania Espanola de Petroleos SA (CEP.MC), or Cepsa.

In a statement, European regulators said their initial probe had uncovered potential problems with the venture because it "may threaten competition."

At present, Shell's Spanish unit is active in refuelling planes at Spanish airports while Cepsa supplies the jet fuel.

But, the regulators said, "Cepsa appears to be a natural candidate to become active in the newly liberalized market" of servicing jets as well.

Together, the regulators said, the two companies would have a dominant position for both the supply and servicing of jet fuel at the Malaga and Seville airports and "the consequences of this vertical integration deserve to be closely reviewed."

Spain recently deregulated its airport ground handling service market to conform with European Union law.

The Spanish government requested the referral and European regulators agreed because the two companies' proposed joint venture, called SIS, has no activities outside Spain.

-By William Echikson, Dow Jones Newswires; 32-2-285-0134; william.echikson@dowjones.com