ANCHORAGE (AP) -- The Atlantic Richfield Company is no more. Arco has been taken over by BP Amoco. Chief executive John Browne signed the papers Tuesday in London making the $25 billion merger official.
Arco stock stopped trading on the New York Stock Exchange Monday afternoon. BP now will begin folding Arco's properties into its own holdings.
The takeover makes BP Amoco the world's third-largest publicly traded oil and gas business.
BP Amoco replaced each share of Arco common stock with 1.64 BP Amoco shares. The transaction brings the buyout to a close five days after the Federal Trade Commission ended its opposition to the deal and allowed it to proceed.
In order to win the FTC's approval, BP Amoco agreed to sell Arco's Alaska holdings -- oil and gas interests, tankers, pipelines and exploration rights -- to Phillips Petroleum Co. for $7 billion.
That deal is expected to be wrapped up sometime within the next couple of weeks.
The FTC had been concerned that BP Amoco would have an uncompetitive share of Alaska crude oil production if it were allowed to keep Arco's holdings.
Under the FTC agreement, London-based BP Amoco also must sell some pipeline and oil storage holdings in Cushing, Oklahoma.
FTC approval came after months of intense negotiations. In February, the commission's lawyers blocked the acquisition and prepared to fight it in federal court.
They said the combination would create ''a colossus'' that would dominate oil exploration, production and transportation in Alaska and dictate prices to West Coast refiners, which rely heavily on Alaska crude.
The divestiture agreed to on Thursday would reduce the combined new company's holding in Alaska from roughly 70 percent to an estimated 45 percent.
The merger ends Los Angeles-based Arco's successful career in Alaska.
Arco made two of Alaska's greatest natural resource finds -- the Swanson River oil field in 1957 and the huge Prudhoe Bay discovery in 1968.
Both of the discoveries boosted Alaska's fortunes and put the state on the map of national and international business and affairs.
''I've got a soft spot in my heart for Arco,'' said Jack Roderick, author of ''Crude Dreams,'' a history of Alaska's oil business. ''This was a company that wasn't afraid to take chances -- it's made a big difference to the state.''
Richfield Oil, one of Arco's corporate ancestors, struck Alaska's first large oil field near Swanson River on the Kenai Peninsula in 1957.
The discovery invigorated Alaska's oil exploration prospects. By the early 1960s, more than 100 companies were exploring in the state, Roderick said.
Swanson also provided a steady stream of money to the cash-strapped territorial government, bolstering Alaska's chances for statehood.
By the mid-1960s, the companies shifted most exploration to the North Slope. Richfield was small compared with its exploration counterparts: BP and Sinclair Oil.
In 1966, Arco was born when Richfield merged with a struggling East Coast refiner, once owned by John D. Rockefeller, called Atlantic Refining.
The new company, named Arco, needed oil. And it found it, a massive pool of it, at Prudhoe Bay.
The 13 billion-barrel field ''is the most important economic event in Alaska's history,'' Roderick told the Anchorage Daily News.
Discovery sparked a construction and exploration boom. Tax and royalty revenue off the field left Alaska awash in cash. The Bush got new schools, Anchorage got performing centers.
With 22 percent of Prudhoe's oil and stakes in four other large North Slope fields, Alaska became the center of Arco's world, a place where every employee who wanted to rise in the company must work, said David Heatwole, an Anchorage resident and former Arco Alaska executive.
Alaska oil thrust Arco into the ranks of the world's largest companies. With Alaska profits, Arco began a global exploration hunt in the 1980s, eventually operating in Algeria, Venezuela, Russia and elsewhere.
But having Arco's fortunes tied to the North Slope would prove perilous. In 1988, Alaska production peaked at about 2 million barrels a day. Striving to find oil outside Alaska, the company searched all the world's hot spots, but never matched its Alaska success.
Through a series of discoveries in the late 1990s, including the 429 million-barrel Alpine field, Arco was on track to stem falling Alaska production by the year 2000.
But Arco was vulnerable because its costly international programs were faltering. During the oil price collapse in late 1998 and early 1999, chief executive Mike Bowlin went to BP, looking for a deal. BP announced the takeover on April 1, 1999.
Phillips hopes to provide jobs for most Arco Alaska employees when it takes over in the coming weeks.
''Hopefully, some of what made Arco great will carry on,'' Heatwole said.
Peninsula Clarion ©2014. All Rights Reserved.