FTC threatens to block BP's Alaskan takeover unless oil giant gives ground
Thursday 02 December 1999
The US Federal Trade Commission is understood to have received advice from its own staff that the merger, as it stands, should not be allowed. Antitrust officials are thought to be concerned about the impact the takeover would have on petrol prices on the US West coast where BP Amoco would become the dominant supplier of crude oil to refineries.
According to US reports, some FTC officials believe that their objections will be "difficult to impossible to fix" no matter what concessions BP Amoco is prepared to offer.
BP Amoco played down the significance of the interim ruling by FTC officials saying: "We look forward to seeing what objections the FTC has and sitting down with them to consider remedies. We are confident that on that basis the deal will go ahead."
Industry observers suspect that the FTC may have made its objections known in order to strengthen its negotiating position in forthcoming discussions with BP Amoco. The FTC would need a "court-proof" case in order to block the deal outright.
BP Amoco has already offered to make concessions to the Alaskan state authorities to overcome concerns about the Arco takeover. These mainly consist of selling off 175,000 barrels of production capacity of Alaskan crude along with exploration leases. As things stand, the two companies account for 724,000 of the one million barrels pumped each day from the Alaskan fields. Alaska supplies about half the refinery needs of the West Coast, where Arco acts as petrol "discounter" guaranteeing to keep petrolprices as low as possible.
The FTC could demand sales of production assets in Alaska by BP Amoco and an undertaking that Alaskan crude prices are indexed to the price of West Coast Intermediate. BP Amoco could also be required to supply refineries other than its own on terms based on the indexed price.
Analysts calculate that the BP Amoco-Arco merger will yield $1bn of cost savings, of which $200m will come from combining operations in Alaska. The concessions already offered to the Alaskan authorities will knock $60m off these savings.
Sales of the tablet are set to fall again, say analysts
Follow the latest updates from the Monday night Premier League fixture
Met Police confirm there was a 'minor disturbance' and that no-one was arrested
George Lucas criticises the major Hollywood film studios
Does Chris Grayling realise what a vague concept he is dealing with?
Trend which requires crisps, a fork and a strong stomach is sweeping Mexico's streets
Concerns raised phenomenon is threatening resort's image as a family destination
I Am Bread could actually be a challenging and nuanced title
Peter Biaksangzuala died from his injuries in hospital on Sunday
- 1 Indian footballer Peter Biaksangzuala dies after injuring spine doing somersault celebration
- 2 Jack the Ripper: Scientist who claims to have identified notorious killer has 'made serious DNA error'
- 3 Drink alcohol and eat meat to improve male fertility - but cut down on coffee, studies suggest
- 4 Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
- 5 Lynda Bellingham dead: Loose Women presenter dies after battle with colon cancer
Sophia Loren: How I rejected Cary Grant and 'pulverised' Marlon Brando with my eyes
Banksy arrest hoax: Internet duped by fake report claiming that the street artist's identity has been revealed
'Russian submarine spotted' by Swedish military off coast of Stockholm
Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
Oscar Pistorius sentence: Athlete's wealth and notoriety provoke an overdue debate on South African prisons
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Sorry Judy Finnigan – Ched Evans is no less sickening than an alleyway rapist
Residents should throw a street party and mix with immigrant neighbours, councils told
Workers 'could be forced to pay £5 a week' to get benefits
Russell Brand threatened with arrest after filming outside Fox News headquarters
London bus driver allegedly kicks gay couple off for kissing
iJobs Money & Business
£18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...
£60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....
£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...
£27000 - £32000 Per Annum: Clearwater People Solutions Ltd: Our large charity ...