BP Amoco-Arco Merger Goes From Red to Yellow

Those with a soft spot for polysyllabic corporate monikers can rejoice — the BP Amoco-Arco deal is on again. When first announced late last year, the $30 billion merger raised eyebrows among federal regulators, who moved to block the deal in court. The big problem wasn't size — after all, Exxon and Mobil last year combined in an $80 billion deal. Rather, according to the Federal Trade Commission, it was the fact that the combined entity would own 70 percent of Alaska's oil fields, giving it a monopolistic hold on West Coast gasoline prices.

In order to get around the government's objections, the firms announced Wednesday that they'd reached an agreement to sell Arco's Alaska holdings to Phillips Petroleum for about $6 billion. The court, in turn, was expected to suspend court hearings indefinitely, with the FTC vowing to sit back down with the firms and make a good-faith effort to hammer out a deal. Of course, this is all still cold comfort to drivers on the West Coast who, for a different reason — OPEC production controls — are currently paying nearly $2 per gallon for gas.