Gas Guzzling Continues With BP-Arco Merger

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LONDON: Another day, another oil merger. British Petroleum is at it again: in talks to buy Los Angeles-based Atlantic Richfield Co. in an estimated $25 billion deal, just months after swallowing Amoco for $57.6 billion in December. Why the sudden craving for company? For the same reason that Exxon and Mobil -- not to mention Total and Petrofina -- teamed up in December: Oil is cheap and business is lousy these days, and the industry's behemoths are eager to create efficiencies of scale by scooping up their rivals. The proposed BP-Arco deal, in particular, would consolidate the two companies' operations in Alaska. Combined, the two would own more than 70 percent of the trans-Alaska pipeline.

Efficiency, of course, means layoffs. BP Amoco has already cut 10,000 jobs since that merger; ailing Arco has announced 1,200 cuts since October alone. Arco is reportedly asking a sizable 20 percent premium over its $21 billion market value, and if the deal gets past negotiators, government regulators and a planned stockholder vote this week, more oilmen are sure to join their former colleagues in the unemployment line. The investment bankers, at least, are getting plenty of work these days.