[Federal Register Volume 63, Number 194 (Wednesday, October 7, 1998)]
[Notices]
[Pages 53920-53921]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-26854]


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FEDERAL TRADE COMMISSION

[File No. 981-0166]


Shell Oil Company, et al.; Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of

[[Page 53921]]

federal law prohibiting unfair or deceptive acts or practices or unfair 
methods of competition. The attached analysis to Aid Public Comment 
describes both the allegations in the draft complaint that accompanies 
the consent agreement and the terms of the consent order--embodied in 
the consent agreement--that would settle these allegations.

DATES: Comments must be received on or before December 7, 1998.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 6th St. and Pa. Ave., NW, Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:
William Baer, FTC/H-374, Washington, DC 20580 (202) 326-2932 or John 
Hoagland, Dallas Regional Office, Federal Trade Commission, 1999 Bryan 
St., Suite 2150, Dallas, TX 75201 (214) 979-9350.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of 
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby 
given that the above-captioned consent agreement containing a consent 
order to cease and desist, having been filed with and accepted, subject 
to final approval, by the Commission, has been placed on the public 
record for a period of sixty (60) days. The following Analysis to Aid 
Public Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for October 1, 1998), on the World Wide Web, at ``http:/www.ftc.gov/
os/actions97.htm.'' A paper copy can be obtained from the FTC Public 
Reference Room, Room H-130, Sixth Street and Pennsylvania Avenue, NW, 
Washington DC 20580, either in person or by calling (202) 326-3627. 
Public comment is invited. Such comments or views will be considered by 
the Commission and will be available for inspection and copying at its 
principal office in accordance with Section 4.9(b)(6)(ii) of the 
Commission's Rules of Practice (16 CFR 4.9(b)(6)(ii)).

Analysis to Aid Public Comment on the Provisionally Accepted 
Consent Order

    The Federal Trade Commission (``Commission'') has accepted for 
public comment from Shell Oil Company (``Shell'') and Tejas Energy, LLC 
(``Tejas''), a wholly owned subsidiary of Shell, an agreement 
containing Consent Order designed to remedy the anticompetitive effects 
resulting from Shell and Tejas' proposed acquisition of certain gas 
gathering assets of The Coastal Corporation (``Coastal''). The Consent 
Order requires the divestiture of approximately 171 miles of Coastal's 
gas gathering pipeline in western Oklahoma and the Texas panhandle to a 
Commission-approved buyer.
    This agreement has been placed on the public record for sixty (60) 
days for the receipt of comments from interested persons. Comments 
received during this period will become part of the public record. 
After sixty (60) days, the Commission will again review the agreement 
and the comments received, and will decide whether it should withdraw 
from the agreement or make final the agreement's Order.
    On January 20, 1998, Transok, LLC (``Transok''), a wholly-owned 
subsidiary of Tejas, and ANR Field Services Company and ANR Production 
Company (collectively referred to as (``ANR''), subsidiaries of 
Coastal, entered into a Letter of Intent for Transok to acquire gas 
gathering assets of ANR located in Oklahoma, Texas, and Kansas. Gas 
gathering is the pipeline transportation of natural gas from a wellhead 
or central delivery point to a gas transmission pipeline or gas 
processing plant. The Commission found that the acquisition may create 
competitive problems in parts of Roger Mills, Beckham, Custer, Washita, 
Caddo and Grady Counties, Oklahoma, and Wheeler County, Texas 
(hereafter referred to as the overlap counties). The Commission's 
Complaint alleges that Transok's acquisition agreement with ANR 
violates Section 5 of the Federal Trade Commission Act, as amended, 15 
U.S.C. 45, and the acquisition, if consummated, would violate Section 5 
of the Federal Trade Commission Act and Section 7 of the Clayton Act, 
as amended, 15 U.S.C. 18.
    With the overlap counties, Tejas, through its subsidiary Transok, 
is the largest gas gatherer and Coastal, through its ANR subsidiaries, 
is a substantial competitor in gas gathering. Six areas were identified 
where gas producers could only turn to Tejas and Coastal or, at most, 
one other gas gatherer, for gas gathering services. In these areas, the 
proposed merger would eliminate competition between Tejas and Coastal 
in providing gas gathering services to gas producers and would likely 
lead to anticompetitive increases in gathering rates and an overall 
reduction in gas drilling and production. It is unlikely that the 
competition eliminated by the proposed acquisition would be replaced by 
new entry into the gas gathering market in these areas.
    The proposed Consent Order requires Shell and Tejas to divest parts 
of the ANR pipeline system within these six areas. The gas gathering 
assets to be divested are listed, with accompanying maps showing the 
locations of the pipelines, in Schedule A of the proposed Consent 
Order. The purposes of the divestiture are to ensure the continued use 
of the Schedule A assets as gas gathering assets and to remedy the 
lessening of competition resulting from the acquisition.
    Shell and Tejas must divest the assets by January 5, 1999, or 
thirty days following the consummation of the acquisition, whichever is 
later. If Shell and Tejas fail to divest the assets by the deadline, 
the Commission may appoint a trustee to sell the assets. The trustee 
may include additional assets with those specified in Schedule A to 
assure the marketability, viability, and competitiveness of the 
Schedule A assets so as to accomplish expeditiously the remedial 
purposes of the order. Shell and Tejas have agreed to maintain the 
assets that are being divested in their current condition and provide 
gathering service at existing terms and conditions to customers under 
contract with ANR until the Schedule A assets are sold.
    The purpose of this analysis is to invite public comment concerning 
the consent order. This analysis is not intended to constitute an 
official interpretation of the agreement and order or to modify their 
terms in any way.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 98-26854 Filed 10-6-98; 8:45 am]
BILLING CODE 6750-01-M