February 02, 2000 --- Vol. 6, No. 4February 2000

FTC to file for injunction against BP Amoco-ARCO combination

The U.S. Federal Trade Commission said Feb. 2 that it will seek a preliminary injunction in federal district court to prevent the combination of BP Amoco p.l.c. and Atlantic Richfield Co. The agency cited concern with antitrust issues in exploration and production of Alaska North Slope crude oil and its sale to West Coast refineries, and in the market for pipeline and storage facilities in Cushing, Okla.

BP Amoco and ARCO said in a statement that they will pursue the issue in court.

"We are surprised and disappointed that the FTC has rejected all efforts for a positive resolution," the companies said. "We have consistently been open to improvement of our original proposal, and we have addressed the concerns of the state of Alaska. We have been, and remain, willing to discuss any reasonable options that might lead to a negotiated settlement.

"We regret," the companies said, "that the only course now open to us is to resolve the issue through litigation but we believe we have a compelling case in support of our combination which we will argue vigorously in court."

Richard G. Parker, director of the FTC's Bureau of Competition, said in the agency's statement that the proposed merger violates the antitrust laws. "We will prove in federal court that BP has market power and that it has used that market power to maintain higher prices on the West Coast by exporting crude oil to the Far East. This deal will cement that market power and harm competition by creating a significant risk that crude oil prices would be higher on the West Coast than they would be without the deal."

BP Amoco and ARCO said: "Any suggestion that there is a special West Coast market for Alaskan crude oil that functions independently of world crude prices is without foundation. In fact, the proposed combination of our companies will drive down Alaskan production costs, making Alaskan crude oil more competitive in the world market."

Point Thompson backpressure system down for inspection, repair

Alyeska Pipeline Service Co. said Feb. 2 that the backpressure control system for Thompson Pass was shut down Jan. 31 and will be out of service for 10-14 days for inspection and repair.

Jan. 30, pieces of a pipeline cleaning pig arrived at the Valdez Marine Terminal. The transmitter/locator for the pig was detected in the backpressure piping in front of one of the backpressure valves; locations of other pig components have not been determined.

Technicians will inspect the pig trap, isolate the backpressure system and clean and inspect the backpressure piping to determine if other components of the pig have traveled into the backpressure piping and are inhibiting its proper operation.

The backpressure control system was installed in 1997 to eliminate vibrations in the pipeline on the south slope of Thompson Pass.

Alyeska said that vibrations experienced while the system is off-line do not create a risk to pipeline and that residents near the pipeline in this area have been notified of the situation and the repair schedule.

Petroleum News - Phone: 1-907 522-9469 - Fax: 1-907 522-9583
[email protected] ---