OT: FTC to argue BP gouging by Amoco

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Feb. 4, 2000, 7:30PM FTC to argue BP gouging by Amoco

WASHINGTON -- The federal government will argue that a refinery operated by Texaco and Royal Dutch/Shell Group was among the victims of price gouging by BP Amoco, say people familiar with the government's bid to block BP Amoco from acquiring Atlantic Richfield Co.

The Federal Trade Commission has said it will show that BP Amoco, the No. 1 producer of Alaskan oil, overcharged West Coast refiners that are heavily dependent on North Slope crude. Refineries that could easily switch to oil from other sources were charged less, the FTC asserts.

The FTC went to federal court in San Francisco on Friday seeking to block the acquisition. The case was assigned to U.S. District Judge Susan Illston.

"BP currently exercises monopoly power in various markets for the sale of crude oil to refineries on the West Coast," the FTC claimed. The company exerts its power "`through price discrimination" and reducing supply to raise prices by selling crude to Asia and other U.S. markets, the agency said.

The acquisition of Arco would eliminate "the firm most likely to constrain BP's exercise of monopoly power" through its exploration and production in Alaska, the FTC said.

BP Amoco, the world's No. 3 publicly traded oil company and Arco, the seventh-largest U.S. oil company, say they are prepared to fight the agency's request for a preliminary injunction. They argue that the price of Alaskan crude is not subject to manipulation because it is set on the world market.

The FTC staff, headed by Richard Parker, has gathered evidence that Tosco, the nation's largest independent oil refiner, Tesoro Petroleum Corp. and Equilon Enterprises, the joint marketing and refining venture of Texaco and Houston-based Shell Oil Co., paid higher prices for Alaskan crude than other West Coast refiners, the people familiar with the case said.

Spokesmen for Equilon, Tesoro and Tosco declined to comment. BP Amoco declined to comment on specific

link

http://www.chron.com/cs/CDA/story.hts/business/448011

-- Carl Jenkins (Somewherepress@aol.com), February 05, 2000


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