# Phillips Petroleum Company; Analysis to Aid Public Comment > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A97-606 ## Record - **Collection:** Federal Register - **Document type:** Notice - **Published:** January 10, 1997 - **Citation:** 62 FR 1459 ## Text FEDERAL TRADE COMMISSION [File No. 961-0056] Phillips Petroleum Company; Analysis to Aid Public Comment AGENCY: Federal Trade Commission. ACTION: Proposed consent agreement. ----------------------------------------------------------------------- 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 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A97-606. Public record. Not legal advice.