More Oil Mergers May Follow Exxon-Mobil Deal

Exxon Corp.'s $77.2 billion purchase of Mobil Corp., the richest corporate merger ever, probably won't be the last of the continuing consolidation in the oil industry. Even though Royal Dutch/Shell Group and Texaco Inc. have broken off negotiations on combining their European refining and marketing operations, British Petroleum Co. PLC's planned $48 billion purchase of Amoco Corp. is on track. And other oil firms are said to be quietly discussing mergers or alliances. Driving the industry's consolidation are low crude oil prices. On Monday they plunged to $11.22 a barrel on the New York Mercantile Exchange, the lowest level since 1986. Still, some oil experts warn of future oil price and supply problems. One, David Lanciault, an A.T. Kearney Inc. vice president based in Dallas, points out that world oil production may peak as early as 2002 and notes "irrefutable statistics" showing rising world oil demand, which is expected to double in the next 50 years. An oil pinch could come within a decade, he says.