Phillips CEO assures Alaskans company will compete on Slope

Legislative leaders endorse Arco buyout

Posted: Friday, March 17, 2000

Cooperation and competition aren't mutually exclusive in North Slope oil operations, Phillips Petroleum CEO Jim Mulva said Thursday.

Mulva, speaking at a Juneau news conference, said his company's agreement to purchase the Alaska assets of Atlantic Richfield Co. makes Phillips both a partner and a competitor to BP Amoco, the major player on the Slope.

BP is offering to shed Arco operations in the state to win federal approval for acquiring the rest of the company worldwide.

BP and Phillips have signed a ``definitive document'' that will trigger the $7 billion sale once the Federal Trade Commission approves the BP-Arco merger, Mulva said. The FTC dropped legal action to block the merger this week as BP firmed up the divestiture.

Although watchdog groups were heartened by the fact that no single company would control the Prudhoe Bay oil and gas fields or the trans-Alaska pipeline, some raised questions about whether BP and Phillips would be sufficiently competitive to serve the public interest in Alaska.

Mulva said the sale agreement for Arco assets in Alaska is ``fairly straightforward,'' although he said the document is unlikely to be made public. There are no side agreements, he said.

``We want to be a good partner,'' he said. ``We want to be a strong competitor.''

Mulva was joined at the brief Centennial Hall news conference by House Speaker Brian Porter and Senate President Drue Pearce, both Anchorage Republicans.

Porter, who had refrained from endorsing the deal when it was announced Wednesday, expressed unqualified enthusiasm about Mulva's promise to continue Arco's existing exploration plans and operations.

Mulva emphasized Thursday

that he will not lay off any employees, dispose of any assets, scale back exploration or put any capital investment plans on hold, either at Phillips or Arco. He also vowed to seek commercialization of North Slope natural gas before 2010, with ``no preconceived, preferred alternative'' about the mix of technologies needed to bring it to market.

``I'm impressed,'' Porter said. ``And I stand corrected.''

Pearce said it was encouraging that Mulva received standing ovations when meeting with Arco employees Wednesday and with legislators Thursday.

``We are sorry to see Arco go. They have been great friends and part of the family,'' Pearce said.

But Phillips has been ``a safe, reliable operator'' in Cook Inlet and has long expressed a desire to play a larger role on the North Slope, she said.

Meanwhile, Backbone, a citizens group formed in response to the originally proposed BP-Arco merger, declared victory in a news release Thursday, calling the outcome ``a tremendous win for a rag tag army of Alaskans from all walks of life and all political stripes.''

In Washington, D.C., though, the environmental organization Greenpeace was not satisfied, saying BP is still directing Alaska oil policy to the detriment of the public. ``The Alaskan oil industry may have a new name, but it's still the same dirty game,'' spokesman Iain MacGill said in a news release.

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