State letter on history of BP-Arco merger misrepresents an important detail

In the letter to legislative leaders explaining what work is being done or will be done on the BP-Hilcorp sale, Department of Natural Resources Commissioner Corri Feige includes a mistake about federal actions regarding the BP-Arco merger in 2000.

“Unlike the BP-Arco merger that closed in 2000, which was subject to oversight from the Securities and Exchange Commission, the proposed transaction has undergone review by the Federal Trade Commission to identify any antitrust or anticompetitive issues induced by the transaction,” Feige wrote.

This is either clumsy writing or a failure to look up the records because the Federal Trade Commission was the central federal agency involved in reviewing the $27 billion BP-Arco merger.

The FTC deals with antitrust issues, while the SEC focuses on the securities markets.

Feige is claiming that the state is conducting due diligence on the BP-Hilcorp sale, though the Dunleavy administration didn’t bother to mention this to legislators or the public until this week. The mistake in the letter about federal review of the BP-Arco merger two decades ago doesn’t build confidence in the level of due diligence.

It was the Federal Trade Commission that temporarily stopped the BP-Arco merger in 2000, charging on Feb. 4, 200 that the combination would violate antitrust laws. This is the complaint, which alleged that the merger would reduce competition in the exploration and production of Alaska oil and its sale to West Coast refineries.

To get the merger approved by the FTC, BP had to sell Arco’s Alaska assets, which it did to Phillips Petroleum for $7 billion. Phillips merged with Conoco in 2002.