FTC okays Chevron Texaco merger

Petroleum News Alaska

The U.S. Federal Trade Commission said Sept. 7 that it has approved the merger of Chevron Corp. and Texaco Inc. subject to divestitures.

In Alaska and a number of other states, Alaska Attorney General Bruce Botelho said, Texaco must divest its general aviation fuel business.

In the gasoline market, Botelho said, Chevron has about 15 percent of the Alaska market and a joint venture of Texaco and Shell, Equilon, has about 13 percent of the market under the Texaco brand.

Under terms of the agreement reached with the FTC and 12 states, the $45 billion merger requires divestiture of all of Texaco's interests in both Equilon Enterprises LLC and Motiva Enterprises LLC (owned by Shell, Texaco and Saudi Refining Inc.), as well as other divestitures including Texaco's general aviation business in 14 states.

Shareholders of Chevron and Texaco will vote on the merger Oct. 9.

Texaco has a small state oil and gas lease acreage position in Alaska, less than 3,000 acres; Chevron has a large position, more than a quarter of a million acres, most of that exploration acreage.

Both companies are minority working interest owners at Prudhoe Bay (less than 1 percent each); Chevron is a minority working interest owner at Kuparuk (less than 1 percent) and a major working interest owner at Point Thomson.