[Federal Register Volume 62, Number 7 (Friday, January 10, 1997)]
[Notices]
[Pages 1459-1460]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-606]


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FEDERAL TRADE COMMISSION

[File No. 961-0056]


Phillips Petroleum Company; Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting 
unfair or deceptive acts or practices and unfair methods of 
competition, this consent agreement, accepted subject to final 
Commission approval, would require, among other things, the 
Bartlesville, Oklahoma based company to divest approximately 160 miles 
of its natural gas pipeline system in Oklahoma. The agreement settles 
allegations that Phillips' acquisition of gas-gathering assets from ANR 
Pipeline Company would substantially reduce competition for natural gas 
gathering services in areas of five Oklahoma counties, because Phillips 
and ANR are the only, or two of very few, companies that provide gas 
gathering services in these areas. The Commission had alleged that the 
acquisition could have resulted in higher rates and reduced drilling 
and production.

DATES: Comments must be received on or before March 11, 1997.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT:
William J. Baer, Federal Trade Commission, H-374, 6th St. and Pa. Ave., 
N.W., Washington, D.C. 20580. (202) 326-2932.
George S. Cary, Federal Trade Commission, H-374, 6th St. and Pa. Ave., 
N.W., Washington, D.C. 20580. (202) 326-3741.
Phillip L. Broyles, Federal Trade Commission, S-2105, 6th St. and Pa. 
Ave., N.W., Washington, D.C. 20580. (202) 326-2805.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46, and Section 2.34 of 
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby 
given that the above-captioned consent agreement containing a consent 
order to cease and desist, having been filed with and accepted, subject 
to final approval, by the Commission, has been placed on the public 
record for a period of sixty (60) days. The following Analysis to Aid 
Public Comment describes the terms of the consent agreement, and the 
allegations in the accompanying complaint. An electronic copy of the 
full text of the consent agreement package can be obtained from the 
Commission Actions section of the FTC Home Page (for December 30, 
1996), on the World Wide Web, at ``http://www.ftc.gov/os/actions/htm.'' 
A paper copy can be obtained from the FTC Public Reference Room, Room 
H-130, Sixth Street and Pennsylvania Avenue, N.W., Washington, D.C. 
20580, either in person or by calling (202) 326-3627. Public comment is 
invited. Such comments or views will be considered by the Commission 
and will be available for inspection and copying at its principal 
office in accordance with Section 4.9(b)(6)(ii) of the Commission's 
Rules of Practice (16 CFR 4.9(b)(6)(ii)).

Analysis to Aid Public Comment on the Provisionally Accepted Consent 
Order

    The Federal Trade Commission (``Commission'') has accepted for 
public comment from Phillips Petroleum Co. (``Phillips'') an agreement 
containing consent order. This agreement has been placed on the public 
record for sixty (60) days for reception of comments from interested 
persons.
    Comments received during this period will become part of the public 
record. After sixty (60) days, the Commission will again review the 
agreement, the comments received, and will decide whether it should 
withdraw from the agreement or make final the agreement's order.
    The Commission's investigation of this matter concerns Phillips' 
proposed acquisition, through its wholly-owned subsidiary, GPM Gas 
Services Corp., of certain pipeline gathering systems owned by ANR 
Pipeline Co. (``ANR''), a subsidiary of Coastal Corporation. Phillips 
and ANR are engaged in gas gathering--the transportation of natural 
gas, for their own or for others' use, from a wellhead or producing 
area to a gas transmission pipeline or a gas processing plant. The 
Commission's investigation of this matter found potential 
anticompetitive problems in certain areas within the following Oklahoma 
counties: Beaver, Ellis, Harper, Woods, and Woodward (``the Oklahoma 
counties''). For certain gas and oil producers in the Oklahoma 
counties, Phillips and ANR are the only, or two of very few, choices 
available to provide gas gathering services. The Commission was 
concerned that the proposed merger would eliminate competition between 
Phillips and ANR in providing gas gathering services. The Commission 
was also concerned that the proposed merger would lead to 
anticompetitive increases in gathering rates to these producers, and an 
overall reduction in gas drilling and production.
    The Agreement Containing Consent Order would, if finally issued by 
the Commission, settle charges alleged in the Commission's Complaint 
that Phillips' acquisition of ANR's gas gathering systems substantially 
lessened competition in the gathering of natural gas in the Oklahoma 
counties. The nature of such competition to be preserved is the actual 
and potential competition to provide gas gathering services to 
producers and other customers. The Commission's Complaint further 
alleges that Phillips' acquisition agreement with ANR violates Section 
7 of the Clayton Act and Section 5 of the Federal Trade Commission Act.
    The order accepted for public comment contains provisions that 
would require Phillips to divest seven parts of a pipeline system, 
consisting of approximately 160 miles of pipe within the Oklahoma 
counties. The gas gathering assets to be divested are listed, with 
accompanying maps showing the locations of the pipelines, in Schedule A 
of the proposed Consent Order. Phillips must divest the assets by April 
30, 1997 or 30 days following the consummation of the acquisition, 
whichever is later. The divestiture must be made to a person approved 
by the Commission and in a manner approved by the Commission. The 
purposes of the divestiture are to ensure the continued use of the 
Schedule A assets in the same type of business in which the assets are 
used at the time of the acquisition, and to remedy the lessening of 
competition resulting from the acquisition.
    If Phillips does not divest the assets to a buyer acceptable to the 
Commission by the deadline, the Commission may appoint a trustee to 
sell the assets. The trustee may include additional assets with those 
specified in Schedule A to assure the marketability, viability, and 
competitiveness of the Schedule A assets so as to accomplish 
expeditiously the remedial purposes of the order.
    For ten (10) years from the date that the order becomes final, the 
order would require prior Commission notification before Phillips could

[[Page 1460]]

acquire from any one person during any 18-month period more than five 
miles of gas gathering pipelines located within certain portions of the 
Oklahoma counties.
    In a separate agreement with Phillips, the Commission expressed 
concern that it might not have an adequate legal remedy if the proposed 
acquisition were consummated prior to Commission action. Phillips has 
agreed to maintain the assets that are being divested in their current 
condition and provide gathering service at existing terms and 
conditions to customers under contract with ANR until the Schedule A 
assets are either sold or the Commission decides not to accept this 
order.
    The purpose of this analysis is to invite public comment concerning 
the consent order. This analysis is not intended to constitute an 
official interpretation of the agreement and order or to modify their 
terms in any way.
Donald S. Clark,
Secretary.
[FR Doc. 97-606 Filed 1-9-97; 8:45 am]
BILLING CODE 6750-01-M