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Trans-Alaska pipeline divestiture required in Exxon Mobil merger
The state of Alaska has required Exxon to divest Mobil’s 3 percent share of the trans-Alaska pipeline system in order to resolve the state’s competitive concerns regarding the merger of the two companies, Alaska Attorney Bruce Botelho said Nov. 30. The $73.7 billion merger was first announced Dec. 1, 1998.
“Exxon and Mobil both own shares in TAPS and this divestiture will ensure that the merger of the two companies does not stifle pipeline competition,” Botelho said. “Without divestiture, the merger would have increased Exxon’s share of the pipeline and eliminated a competitor that has lowered its rate for transporting petroleum on the pipeline several times in the past year. Without this remedy, small producers on the North Slope would have lost much of the benefits of competition on TAPS that has recently emerged.”
Alaska conducted extensive investigations and negotiations in cooperation with the FTC and other states to ensure that the merger does not have an anti-competitive effect. The state of Alaska filed its lawsuit and proposed consent decree Nov. 30 in the U.S. District Court in Anchorage, jointly with the states of California, Oregon and Washington. Exxon and Mobil have already agreed to the terms and, if approved by the court, the consent decree will resolve the suit.
The FTC announced its preliminary approval of the merger Nov. 30 and the FTC’s consent decree requires the divestiture of Mobil’s share of TAPS. Other required divestitures did not affect Alaska.
Deal increases Exxon’s position at Point Thomson State records show Mobil Alaska E&P as the owner of 46,775 acres of Alaska state oil and gas leases including a 0.37 percent working interest in the Kuparuk River unit and a 1.35 percent working interest in the Prudhoe Bay unit.
Combining the acreage for Exxon and Mobil, ExxonMobil will displace Forcenergy as number six in state oil and gas lease acreage, after ARCO, BP, Chevron, Unocal and Anadarko. Exxon was formerly seventh, Mobil was 11th.
Mobil was the third largest acreage holder at Point Thomson. Exxon, with 45 percent working interest, is unit operator; Chevron has 21 percent; Mobil 14 percent; Phillips 12 percent; BP 5.5 percent.
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