Arco to Sell Okla. Pipeline Connections, Tanks, Sources Say

Atlantic Richfield Co., moving to eliminate one obstacle to its proposed $27-billion buyout by BP Amoco, will put oil pipeline connections and storage tanks in Oklahoma up for sale, a person familiar with the situation said Wednesday.

The Federal Trade Commission filed suit this month seeking to block the buyout. Among its objections is that BP’s ownership of Arco’s connections at Cushing, Okla., would give BP Amoco control of 40% of the pipeline and storage capacity at the place where benchmark West Texas intermediate crude oil is delivered. The resulting company would thus be able to manipulate the price of crude oil futures contracts on the New York Mercantile Exchange, the suit says.

Arco declined to comment on whether it plans to sell the assets. The Los Angeles-based company owns the Seaway pipeline, the main route to Cushing for Gulf Coast oil.

Possible buyers for Arco’s capacity could be pipeline operators Enron Corp., Williams Cos. or Duke Energy Corp., analysts said. Duke and Enron officials declined to say whether Arco has approached them. Williams representatives could not be reached for comment.

Arco shares fell $2.44 to close at $63.88 on the New York Stock Exchange. BP Amoco American depositary receipts fell 75 cents to close at $47.38.