A group of 14 leading energy and petrochemical companies from across the world-wide industry today announced they will launch an independent industry procurement exchange. Discussions are already underway with further important partners and participants, including members from the supplier community.

The exchange will provide a global electronic marketplace open to buyers and sellers both large and small. In addition, the exchange will develop technologies and design to remove inefficiencies in procurement, supply chain management and capacity utilisation. The founding partners will work together to make the exchange attractive for all companies across the industry to use.

The scope of the exchange will initially include all procurement activities related to goods and services used within the oil and gas exploration and production business and the petrochemicals, refining, marketing and retail sectors of the industry.

Repsol YPF is most satisfied to take part in this project with other major companies, including other international operators, as one of several ventures in electronic marketing already under way. This project is, in fact, part of a wider programme for E-commerce being developed by Repsol YPF, in which other business areas will be included, in Latin America and Spain.

The collective annual procurement spend of the founding partners exceeds $125 billion: 40% of this spend is in North and South America, 40% in Europe and Africa and 20% in Asia Pacific and the Middle East. The partners plan to use the exchange for a significant amount of their procurement.

An independent company will be created to own and operate the exchange. Initially at least three-quarters of the equity in the new company will be owned by the energy and petrochemical companies. The remainder will be allocated to staff and technology providers.

It is intended to prepare the company for initial public offering (IPO) in the future.

The exchange will be launched using the CommerceOne Marketsite platform. Other technology providers will be selected by the exchange to ensure sufficient flexibility to meet the needs of the industry.

Morgan Stanley Dean Witter has advised in the formation of the exchange.