Three West Coast states are coordinating their efforts with theFederal Trade Commission to resolve the antitrust problemsassociated with BP-Amoco’s acquisition of Atlantic Richfield. Inthe event the issues can’t be worked out, the states said they willbring a lawsuit to block the $26 billion marriage.

“Oregon, Washington and California are all working with the FTCin reviewing the proposed merger” and its accompanying antitrustissues, said Jan Margosian, a spokeswoman for Oregon’s AttorneyGeneral’s Office. If these can’t be resolved, the states and theFTC “are still considering possible litigation to block themerger.”

In contrast, the state of Alaska — which has been an ardentfoe of the proposed merger — said it expects to reach aresolution with BP-Amoco by the end of the week to move forwardwith the transaction.

In Oregon, Margosian said the state’s mainly concerned with themerger’s effects on competition in the upstream markets —exploration, production, transportation and the sale of AlaskaNorth Slope (ANS) crude oil.

It’s also eyeing its impact on the retail gasoline market.Although Oregon isn’t home to the refineries owned by the mergerpartners — they’re located in Washington and California — shenoted the gasoline consumed in the state is supplied by refineriesusing ANS crude. “So that’s why we want to look at the mergerclosely.”

The Attorney General’s Office in Washington confirmed it isinvestigating the merger along with Oregon and California to ensureit’s in compliance with the state and federal antitrust laws. “Wehave several options that are available to us…..A lawsuit is oneof them. But that doesn’t necessarily mean that that’s where we’reheaded,” said spokeswoman Janice Marich.

In Alaska, talks with BP-Amoco “are still under way. We’rere-negotiating a couple of points with the company. And based onthe progress of those discussions, we could have a resolution ofthe state’s position later this week,” said Robert King, aspokesman for Gov. Tony Knowles.

One of the points being re-negotiated deals with the price ofnatural gas. BP-Amoco has agreed to commit a certain amount ofnatural gas at a specific price (initially set at $1 per billionBtus) to any new gas pipeline or group that would meet a number ofconditions, such as being financially viable and in operation byabout 2010, King notedBut some have expressed concerns that “aprice set at that level was too high and would preclude anypipeline effort from going through.”

He said that competing gas pipeline proposals “are already outthere” — such as Yukon Pacific’s plan to build a gas line toValdez, AK, and discussions about building a pipeline throughCanada to the Lower 48 states.

As soon as Alaska finalizes its negotiations with BP-Amoco, somesources expect the company to “pull the 20-day trigger in hopes ofgetting the merger resolved by the end of the year.” But an insidernoted “I don’t know whether the FTC is going to be able to [meet]”the 20-day deadline under which it would either have to approve themerger or sue to block it.

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