A note from Lou Noto, Chairman and CEO of Mobil Corporation to Mobil's employees today, on the BP-Amoco merger:
BP/AMOCO MERGER
Many of you have asked about the impact on Mobil of the recently announced proposed merger between British Petroleum and Amoco. This merger will create a new competitor approaching the size of Royal Dutch Shell and Exxon. And, if the merger is able to achieve the significant income improvements projected, BP Amoco will certainly raise the bar for top quartile performance.
I'm sure many of you have seen articles in the press and from Wall Street speculating that other majors, such as Mobil, will now need to merge to be competitive. While we are continually looking for ways to improve our business, and no actions should be precluded, a larger size does not necessarily equate to better financial performance and greater shareholder returns. Top quartile performance will depend on our ability to profitably grow the business, to optimize utilization of our existing assets, and to keep our costs at or below competitive levels. Initiatives such as those accomplished over the last few years will continue to play a major part in improving our performance. Fortunately, we see the opportunity to reap very substantial gains from sharpening the performance of our base business and we still retain an extremely attractive slate of growth opportunities. The challenge to all of us will be to capitalize on these and other opportunities.
L. A. Noto |
