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."
