WASHINGTON -- Chevron Corp. is closer to getting its hands on Gulf Oil Corp.'s vast oil reserves in the biggest corporate merger in U.S. history but still must complete a required divestiture to satisfy federal antitrust concerns.
The Federal Trade Commission, on a 4-0 vote, gave final approval Wednesday to Chevron's $13.2 billion takeover of Gulf. In doing so, the FTC accepted the tentative agreement it reached with Chevron in April that would double the firm's oil reserves to 3.9 billion barrels and make it America's third-largest oil company behind Exxon and Mobil.
Chevron, however, must maintain and operate all of Gulf's oil and gas assets independently until it sells off, as ordered by the FTC, one of two Gulf refineries and several thousand Gulf service stations.
Chevron will not have control over Gulf's domestic crude oil reserves and other specified U.S. assets until that time. It has six months to make the divestitures.
'We're glad to be making progress toward what will be complete merger but until there is divestiture, we won't be able to enjoy the benefits,' said John Hamilton, a Chevron spokesman.
Hamilton said Chevron, based in San Francisco, is negotiating to sell the marketing assets to Standard Oil of Ohio. It announced a preliminary agreement in September without releasing any sales figures.
Chevron was called Standard Oil Co. of California when the merger received provisional FTC approval last spring. It changed its name this summer.
The previous record corporate merger, Texaco's $10.1 billion takeover of Getty Oil Co., was approved by the FTC in July.
The FTC consent order requires Chevron to divest:
-Gulf's wholesale gas terminals and Gulf's interest in several thousand gas stations in Kentucky, Tennessee, Alabama, Mississippi, Georgia, Florida and parts of South Carolina.
-Gulf's refinery in Port Arthur, Texas, or Gulf's refinery in Alliance, La.
If Chevron divests the Port Arthur facility, they must also sell 51 percent Gulf's interest in the West Texas pipeline system, the Mesa Pipeline and connecting pipelines.
If it sells the Alliance refinery, it must divest 51 percent of Gulf's interest in the West Texas pipeline.
The FTC must approve all divestitures.
In addition, the order requires Chevron for 10 years to obtain FTC approval for the purchase of assets engaged in petroleum refining, distribution and pipeline transportation in the geographic area specified by the commission.
An antitrust complaint issued with the FTC order alleges Chevron's acquisition of Gulf, as originally structured, would have:
-Lessened wholesale competition in the marketing of gasoline, diesel fuel and home heating oil in the Southeast;
-Decreased competition in the production and transportation of kerosene jet fuel in the East Coast and Gulf Coast and
-Made Chevron a major owner of both the petroleum product pipelines in the Southeast.