BP offers concession on exports

Oil giant will send Alaska crude to California after merger

Posted: Friday, March 24, 2000

WASHINGTON - BP Amoco will stop exporting Alaska crude oil and divert the 60,000 barrels a day to California if it gets approval for its merger with Atlantic Richfield Co., the British-based oil company said Thursday. The oil would be moved through Arco's West Coast refining and marketing system instead.

The company made its intentions known in a letter to Rep. Don Young, R-Alaska, chairman of the House Resources Committee. Young pushed legislation five years ago that ended a ban on exports of North Slope crude.

The BP Amoco decision was hailed by Rep. George Miller, D-Calif., as ``the right thing to do'' and a ``welcomed announcement'' at a time when oil shortages are causing gasoline prices to soar, especially on the West Coast.

The decision to end exports after the current contract expires is contingent on government approval of the BP Amoco purchase of Arco, said BP Amoco spokesman Tom Koch in a telephone interview.

The Federal Trade Commission is reviewing a revised proposal that would have Arco sell all of its Alaska petroleum holdings to Phillips Petroleum Co. as a condition for the merger with BP Amoco. The FTC had rejected and challenged in court an earlier proposal because it said the combined company would dominate oil production on Alaska's North Slope.

It's not known when the FTC will make a decision, although it's widely anticipated the merger will go through.

In the letter to Young, BP Amoco said once the current export contract expires at the end of April, ``we do not have subsequent plans to export.'' The company accounts for all of the current oil exports to Asia - 60,000 barrels a day.

``Once our acquisition of Arco is complete, we would expect to run all of our Alaska crude through Arco's excellent West Coast refining and marketing network,'' wrote Larry D. Burton, BP Amoco's vice president for U.S. governmental affairs.

A half dozen West Coast lawmakers last week called on President Clinton to halt Alaska oil exports, arguing the oil is needed in California, Oregon and Washington.

Congress lifted the restriction on export of North Slope oil in 1995 after extensive lobbying by Alaska's lawmakers and the oil industry. The ban had been in place since construction of the trans-Alaska pipeline.

White House Chief of Staff John Podesta said the administration was reviewing the idea of suspending North Slope oil exports. Administration officials have said privately that it's unlikely any formal action against exports would be taken.

BP Amoco is based in London. Atlantic Richfield has its headquarters in Los Angeles.



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