Arco Reportedly Set to Sell Alaska Oil Fields to Phillips
Atlantic Richfield Co. has agreed to sell its Alaskan oil fields to Phillips Petroleum Co. for $6 billion to $7 billion in an attempt to win U.S. regulatory approval of the Los Angeles-based oil company’s acquisition by BP Amoco, people familiar with the transaction said Tuesday.
The companies may announce the sale today, the sources said. The announcement would prompt the Federal Trade Commission to seek a delay of a hearing scheduled for Monday on its antitrust lawsuit to block the $27-billion buyout, the sources said.
BP Amoco and Phillips declined to comment. Arco did not return calls seeking comment.
The FTC suit alleges that BP Amoco-Arco’s combined ownership of almost three-quarters of Alaskan production could let it raise oil prices on the West Coast. Most Alaskan oil goes to refineries in the region, where gasoline prices are already the highest in the U.S.
FTC officials have said they will clear the acquisition if a suitable buyer can be found for the Alaskan fields, according to people familiar with the agency’s plans.
A delay in the hearing in San Francisco would give the agency time to review Phillips’ financial fitness to acquire Arco’s Alaska operations and use them to compete effectively with the merged company, the sources said.
BP Amoco began seeking offers for Arco’s Alaskan properties in late February. Other interested companies were the Royal Dutch/Shell Group of Europe, San Francisco-based Chevron Corp., and Houston-based Conoco Inc. Shell has said it was interested in the properties but decided not to bid. Chevron and Conoco have declined to comment.
BP Amoco produces about 400,000 barrels a day from Alaska while Arco produces about 324,000 barrels a day. Arco had oil and gas reserves of 1.91 billion barrels in Alaska at the end of last year, 42% of the company’s worldwide reserves of 4.6 billion barrels.
The FTC considers Bartlesville, Okla.-based Phillips an acceptable buyer because it has minimal operations in Alaska and on the West Coast, the sources said. Phillips has a 70% stake in a liquefied natural gas plant in Kenai, Alaska, and small interests in several oil and gas fields in the state.
In New York Stock Exchange trading, Arco shares rose 31 cents to close at $79. Phillips was unchanged at $39.44.
