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Tuesday, December 20, 2005

Alaska Anti-Trust Suit Filed against BP and Exxon


Editor's Note: Senator Wyden reported on the Senate floor today that ExxonMobil and BP have been indicted by the State of Alaska for manipulating gas prices. Wyden said this is new information that bears on the rider to open the Arctic Refuge that has been attached to the defense appropriations bill. Wyden said that the indictment raises "a host of questions" about the ability of oil companies to control prices and the actual revenues that could accrue from oil leasing in the refuge. -- kw/TO

By Toby Shelley
The Financial Times

Tuesday 20 December 2005

ExxonMobil and BP face antitrust action in Alaska as a homegrown pipeline project company accuses them of withholding gas from the market and inflating the price paid for gas by US households.

The Alaska Gasline Port Authority proposes to build a line parallel to the existing trans-Alaska oil pipeline and in competition with a gas pipeline project of ExxonMobil and BP.

In a lawsuit filed in the Fairbanks district court in Alaska, AGPA argues that the two oil companies have conspired to refuse to sell natural gas from their joint reserves of 35 trillion cubic feet in Prudhoe Bay and Point Thomson and other concessions on the North Slope of Alaska.

This alleged action has inflated prices and higher prices have "hurt consumers and businesses throughout Alaska and the rest of the United States", the AGPA said in a statement. It wants the court to tell the oil companies to market the gas rather than leaving it in the ground or reinjecting it, or face having their leases revoked.

The AGPA also alleges that BP is in breach of a condition of its acquisition of Atlantic Richfield. Then, it undertook to negotiate in good faith with AGPA and others over sale of the gas.

The AGPA was formed by three local governments in Alaska in 1999 in order to bring Alaskan gas to market. Its All-Alaska Pipeline project would ensure gas supplies to Alaskan consumers while the bulk of it would be liquefied at Valdez and sold into both the US Mid-West and West Coast markets. The oil company proposal would limit the gas to the Mid-West, the AGPA argues. The AGPA emphasises the benefits its project would bring to Alaska in terms of revenues, jobs, and access to fuel.

No comment was available from BP on Tuesday morning.

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