[Federal Register Volume 78, Number 75 (Thursday, April 18, 2013)]
[Notices]
[Pages 23291-23307]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-09055]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Ecolab Inc., et al.; Proposed Final Judgment and 
Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment, 
Stipulation and Competitive Impact Statement have been filed with the 
United States District Court for the District of Columbia in United 
States of America v. Ecolab Inc., et al., Civil Action No. 1:13-cv-444. 
On April 8, 2013, the United States filed a Complaint alleging that the 
proposed acquisition by Ecolab Inc. of Permian Mud Service, Inc., would 
violate Section 7 of the Clayton Act, 15 U.S.C. 18. The proposed Final 
Judgment, filed the same time as the Complaint, requires Ecolab Inc. to 
divest certain assets Permian has been using to provide deepwater 
production chemical management services in the Gulf of Mexico.
    Copies of the Complaint, proposed Final Judgment and Competitive 
Impact Statement are available for inspection at the Department of 
Justice, Antitrust Division, Antitrust Documents Group, 450 Fifth 
Street NW., Suite 1010, Washington, DC 20530 (telephone: 202-514-2481), 
on the Department of Justice's Web site at http://www.usdoj.gov/atr, 
and at the Office of the Clerk of the United States District Court for 
the District of Columbia. Copies of these materials may be obtained 
from the Antitrust Division upon request and payment of the copying fee 
set by Department of Justice regulations.
    Public comment is invited within 60 days of the date of this 
notice. Such comments and responses thereto, will be filed with the 
Court and posted on the U.S. Department of Justice, Antitrust 
Division's Web site, and, under certain circumstances published in the 
Federal Register. Comments should be directed to William H. Stallings, 
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, U.S. Department of Justice, 450 Fifth Street NW., Suite 7000, 
Washington, DC 20530, (telephone: 202-514-9323).

Patricia A. Brink,
Director of Civil Enforcement.

United States District Court for the District of Columbia

United States of America, U.S. Department of Justice, Antitrust 
Division, 450 5th Street NW., Suite 8000, Washington, DC 20001; 
Plaintiff, v.
ECOLAB INC., 370 Wabasha St. North, St. Paul, MN 55102, and Permian Mud 
Service, Inc., 3200 Southwest Freeway, Houston, TX 77027, Defendants.

Case 1:13-cv-00444, Filed 4/8/2013

Complaint

    The United States of America, acting under the direction of the 
Attorney General of the United States, brings this civil action to 
enjoin the acquisition of Permian Mud Service, Inc., (``Permian''), by 
Ecolab Inc. (``Ecolab''), and to obtain other equitable relief. The 
United States complains and alleges as follows:

I. Nature of the Action

    1. Ecolab's acquisition of Permian would combine the two leading 
providers of production chemical management services for deepwater oil 
and gas wells (``deepwater PCMS'') in the U.S. Gulf of Mexico 
(``Gulf''). Deepwater PCMS providers design, produce, and apply 
specially formulated chemical solutions to oil or gas wells to 
facilitate hydrocarbon production and protect well infrastructure.
    2. Permian's wholly owned subsidiary, Champion Technologies, Inc. 
(``Champion''), and Ecolab's wholly-owned subsidiary, Nalco Company 
(``Nalco''), are the two largest suppliers of deepwater PCMS in the 
Gulf and vigorously compete head-to-head to win the business of oil and 
gas exploration and production companies (``E&P companies''). If the 
transaction is allowed to proceed, this competition will be lost and 
the merged firm will control approximately 70% of the market, leading 
to higher prices, reduced service quality, and diminished innovation.
    3. Accordingly, as alleged more specifically below, the 
acquisition, if consummated, would likely substantially lessen 
competition in violation of Section 7 of the Clayton Act, as amended, 
15 U.S.C. 18.

II. The Parties and the Transaction

    4. Ecolab is a Delaware corporation headquartered in St. Paul, 
Minnesota. Nalco, its wholly-owned subsidiary, is headquartered in 
Naperville, Illinois and supplies the oil and gas industry with 
deepwater PCMS through its Energy Services Division. Ecolab generated 
$1.87 billion in revenues from oil and gas-related products and 
services in 2011. Nalco is currently the largest supplier of deepwater 
PCMS in the Gulf.
    5. Permian is a Texas corporation headquartered in Houston, Texas. 
Permian provides specialty chemicals and services to the oil and gas 
industry and generated $1.25 billion in revenues in 2011. Permian's 
wholly-owned subsidiary, Champion, is also a Texas corporation and is 
currently the second largest provider of deepwater PCMS in the Gulf.
    6. Pursuant to an agreement dated October 11, 2012, Ecolab agreed 
to purchase Permian for $2.2 billion. The Defendants amended the 
Agreement and Plan of Merger on November 28, 2012 (``First 
Amendment''), on November 30, 2012 (``Second Amendment'') to exclude 
certain assets and adjust the purchase price to $2.16 billion, and 
again on December 28, 2012 (``Third Amendment'').

[[Page 23292]]

III. Jurisdiction and Venue

    7. The United States brings this action pursuant to Section 15 of 
the Clayton Act, as amended, 15 U.S.C. 25, to prevent and restrain 
Defendants from violating Section 7 of the Clayton Act, 15 U.S.C. 18.
    8. Ecolab and Permian provide deepwater PCMS in the flow of 
interstate commerce and their provision of deepwater PCMS substantially 
affects interstate commerce. The Court has subject matter jurisdiction 
over this action pursuant to Section 15 of the Clayton Act, 15 U.S.C. 
25, and 28 U.S.C. 1331, 1337(a), and 1345.
    9. Ecolab and Permian have consented to venue and personal 
jurisdiction in this judicial district.

IV. Trade and Commerce

A. The Provision of Deepwater PCMS in the Gulf

    10. E&P companies rely on the services of deepwater PCMS providers 
to facilitate the safe and efficient production of oil and gas from 
deepwater wells in the Gulf. Throughout the production process, 
deepwater PCMS providers treat wells with blends of chemicals to 
prevent naturally occurring material, such as scale, paraffin, and 
hydrates, from blocking the flow of hydrocarbons to the production 
platform; protect the well's infrastructure from corrosion and damage; 
enable the E&P company to efficiently separate the mix of oil, water, 
and gas produced by the well; and remove or neutralize unwanted 
substances, such as hydrogen sulfide gas, from the production.
    11. Although onshore and shallow water wells also require PCMS, 
deepwater wells (wells drilled in water depths greater than 1,000 feet) 
generally present challenging production issues due to the complex 
infrastructure of many deepwater wells and the high temperatures and 
pressures often found in deepwater wells.
    12. Due to the time and expense required to construct a new 
production platform in deepwater, E&P companies frequently opt to build 
``subsea wells,'' which can connect to existing offshore production 
platforms up to 70 miles away, instead of ``dry-tree'' wells, which 
must be stationed very close to the production platform. Deepwater PCMS 
providers must deliver chemicals to subsea wellbores through 
``umbilicals,'' which are clusters of extremely narrow chemical 
injection, hydraulic, and fiber-optic lines that extend from the 
production platform to the well. Because of the complexities of this 
delivery system and the expense of repairing a chemical line clogged by 
impure or unstable chemicals, E&P companies impose strict qualification 
and quality control requirements on chemicals administered through 
umbilicals.
    13. Strings of narrow piping called ``flow lines'' transport oil 
and gas from a subsea well to the production platform. Because flow 
lines run along the seafloor, they expose the produced oil, water, and 
gas to cold temperatures that cause solids to form and block the flow 
line. Deepwater PCMS providers must specially formulate chemicals for 
deepwater subsea wells that inhibit the formation or accumulation of 
solids during prolonged exposure to seafloor temperatures.
    14. Deepwater wells often share characteristics that complicate 
production (e.g., high pressures and temperatures), but each deepwater 
well has unique characteristics that determine its production 
challenges. E&P companies rely on PCMS providers to assess these 
characteristics and develop formulations specific to each well. When 
devising a treatment program, PCMS providers consider the makeup of the 
well's hydrocarbons, formation rock, and water; as well as conditions 
the hydrocarbons and chemicals will face inside the well and during 
production, such as extreme temperatures and pressures. PCMS providers 
test potential formulations in laboratories that can replicate 
conditions inside the well before settling on the chemical 
formulations, application techniques, and level of service they will 
recommend for a specific project.
    15. A deepwater PCMS provider needs a strong staff of experts to 
successfully compete in the deepwater Gulf. E&P customers hire PCMS 
providers to assess and solve their production challenges and 
continuously manage the well's treatment. They expect PCMS providers to 
have highly trained and knowledgeable employees to monitor each well on 
an ongoing basis, devise new treatment programs when circumstances 
change, and prepare recommendations for potential opportunities. PCMS 
providers also require subject matter experts who can develop new 
products and technologies that are effective in whatever novel 
environments E&P companies operate.
    16. E&P companies typically procure deepwater PCMS through a formal 
or informal bidding process. Potential suppliers are asked to submit a 
proposal including the recommended treatment plan; test results to 
support the treatment plan; prices; past experiences with similar well-
conditions; safety records; information on the company's supply chain, 
training programs, lab facilities, and R&D programs; and the 
resum[eacute]s or experience levels of proposed service personnel.
    17. Customers choose a PCMS provider based on a number of factors, 
including, but not limited to, the efficacy of the proposed treatment 
program, price, the provider's prior track record servicing deepwater 
wells, and the provider's ability to offer timely and competent 
service. Customers also consider the provider's research and 
development (``R&D'') program and ability to advise on the optimal well 
design of new projects.
    18. Although deepwater PCMS represents a fraction of an E&P 
company's overall cost of production, the costs associated with delay 
or failure are high. If the deepwater PCMS provider selects the wrong 
chemicals or fails to adequately monitor or service the well, it can 
cost the customer millions in lost production or compromise the well's 
infrastructure.
    19. Because of the value of deepwater wells and the risks of 
improper treatment, some customers will only accept a bid for a 
particular project from a supplier whom it has thoroughly vetted and 
pre-qualified. As a result, deepwater PCMS providers sometimes compete 
to be designated as preferred or pre-qualified suppliers. Preferred 
suppliers may then bid against each other for specific projects.
    20. There are often only two or three bidders for each deepwater 
PCMS contract in the Gulf, and the bidders typically know whom they are 
competing against for a particular project. Nalco and Champion are the 
two largest deepwater PCMS providers in the Gulf and compete head-to-
head on a substantial number of deepwater PCMS opportunities.

B. The Provision of Deepwater PCMS Is a Relevant Product Market

    21. The provision of deepwater PCMS is a relevant product market 
and line of commerce under Section 7 of the Clayton Act. E&P companies 
are unlikely to forego use of PCMS providers or switch to PCMS 
providers that only have experience onshore or in shallow water in 
response to a small but significant and non-transitory increase in 
deepwater PCMS prices.
    22. The risks of not using a PCMS provider, or using a PCMS 
provider without deepwater operations or experience, greatly outweigh 
the potential cost savings. Deepwater wells present unique production 
issues and operational challenges. The costs of a clogged umbilical 
line are substantial,

[[Page 23293]]

while the cost of deepwater PCMS is a small fraction of the E&P 
company's total operational costs. Improper deepwater PCMS treatment 
can force an E&P company to replace a chemical line, shutdown 
production to make repairs, or forego the profits of full production 
rates achievable through proper PCMS treatment.
    23. Deepwater PCMS are not reasonably interchangeable with onshore 
or shallow water PCMS. Because deepwater basins have unique 
characteristics and well infrastructure, providers of onshore or 
shallow water PCMS typically do not have the relevant know-how and 
experience required to effectively treat deepwater wells. Although 
there are some subsea wells in shallow water, they are typically closer 
to the production platform than deepwater subsea wells, so the 
operational difficulties engendered by umbilicals and flow lines are 
often less severe in shallow water. Additionally, the geological 
characteristics of shallow-water areas of the Gulf differ from its 
deepwater areas, so PCMS providers active in shallow water do not have 
the same familiarity or experience with the formation rocks or 
hydrocarbons found in deepwater. Importantly, because deepwater 
operations differ, onshore and shallow water PCMS providers also 
typically lack a complete suite of chemicals that can tolerate 
umbilical injection or the high pressures and temperatures typically 
found in deepwater wells and the necessary lab and filtration equipment 
to develop and qualify a chemical for umbilical injection or deepwater 
use.

C. The U.S. Gulf of Mexico Is a Relevant Geographic Market

    24. The U.S. Gulf of Mexico is a relevant geographic market for the 
provision of deepwater PCMS under Section 7 of the Clayton Act. E&P 
companies operating in the Gulf are unlikely to switch to a PCMS 
provider without local infrastructure or Gulf-specific deepwater 
experience and expertise in the event of a small but significant and 
non-transitory increase in price.
    25. E&P companies operating deepwater wells in the Gulf require 
their PCMS suppliers to have local infrastructure, such as distribution 
centers, blending facilities, analytical laboratories and sales and 
technical personnel, so that the PCMS provider can have the resources 
it needs nearby to monitor the well and quickly address production 
challenges. These E&P companies will not select a deepwater PCMS 
provider that lacks the Gulf-based infrastructure necessary to 
effectively service their projects.
    26. Although experience in another deepwater basin may be relevant 
to deepwater Gulf operations, each deepwater basin presents unique 
production challenges resulting from its unique combination of 
hydrocarbons, produced water, and geological characteristics. PCMS 
providers operating in other deepwater basins are unlikely to have the 
depth of experience with the particular production challenges that 
frequently affect deepwater wells in the Gulf. Customers are unlikely 
to entrust their wells to PCMS providers without this essential 
experience.

D. Market Participants

    27. The defendants are the two largest providers of deepwater PCMS 
in the Gulf. One additional firm has significant deepwater PCMS 
experience in the Gulf and regularly competes against Nalco and 
Champion for deepwater PCMS opportunities. A handful of other firms 
provide deepwater PCMS but lack the robust track record, requisite 
personnel, and proven product lines that make Champion and Nalco 
successful competitors. Additionally, these other firms do not compete 
for the majority of deepwater PCMS opportunities.

V. Likely Anticompetitive Effects

A. Market Shares and Concentration

    28. The relevant market is highly concentrated and would become 
more concentrated as a result of the proposed transaction. Based on 
2012 revenues, Champion's share of the deepwater PCMS market in the 
Gulf was 34% while Nalco's was 38%.
    29. Concentration in relevant markets is typically measured by the 
Herfindahl-Hirschman Index (``HHI'').\1\ Market concentration is often 
one useful indicator of the likely competitive effects of a merger. The 
more concentrated a market, and the more a transaction would increase 
concentration in a market, the more likely it is that a transaction 
would result in a meaningful reduction in competition that would result 
in harm. Markets in which the HHI is above 2,500 points are considered 
highly concentrated. Transactions that increase the HHI by more than 
200 points in highly concentrated markets will be presumed likely to 
enhance market power.
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    \1\ See U.S. Dep't of Justice and Federal Trade Commission, 
Horizontal Merger Guidelines Sec.  5.3 (2010), available at http://www.justice.gov/atr/public/guidelines/hmg-2010.html. The HHI is 
calculated by squaring the market share of each firm competing in 
the market and then summing the resulting numbers. For example, for 
a market consisting of four firms with shares of 30, 30, 20, and 20 
percent, the HHI is 2,600 (30\2\ + 30\2\ + 20\2\ + 20\2\ = 2,600). 
The HHI takes into account the relative size distribution of the 
firms in a market. It approaches zero when a market is occupied by a 
large number of firms of relatively equal size and reaches its 
maximum of 10,000 points when a market is controlled by a single 
firm. The HHI increases both as the number of firms in the market 
decreases and as the disparity in size between those firms 
increases.
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    30. The deepwater PCMS market in the Gulf currently is highly 
concentrated, with an HHI of over 2,900. The proposed merger would 
significantly increase the HHI by 2,607, rendering the transaction 
presumptively anticompetitive.

B. Likely Anticompetitive Effects

    31. Ecolab's acquisition of Permian would combine their respective 
subsidiaries, Nalco and Champion, the two leading deepwater PCMS 
providers in the Gulf, creating a dominant firm with a greater than 70% 
market share. Nalco and Champion vigorously compete on price, terms of 
sale, service quality, and product development. They have spurred each 
other to develop and improve products, performance and technology, and 
customers have benefitted from this competition. The transaction would 
eliminate the head-to-head competition between Nalco and Champion to 
provide deepwater PCMS in the Gulf.
    32. Nalco and Champion provide deepwater PCMS to wells with similar 
production issues in similar water depths and are two of the few firms 
that have the manpower, technical capabilities and expertise to service 
the Gulf's most challenging wells. Nalco and Champion routinely bid 
against each other on the same deepwater projects in the Gulf and are 
considered by many E&P customers to be close substitutes.
    33. Customers differentiate among deepwater PCMS providers on the 
basis of price, reputation, service quality, product effectiveness, and 
other factors. Nalco's acquisition of Champion would eliminate many 
customers' preferred alternative to Nalco and reduce the number of 
preferred or capable bidders on many projects from three to two. Post-
acquisition, Nalco would gain the incentive and ability to profitably 
raise its bid prices significantly above pre-acquisition levels, reduce 
its investment in R&D, or provide lower levels of service.
    34. The response of the remaining deepwater PCMS firm would not be 
sufficient to constrain an exercise of market power by Nalco after the 
acquisition. Having removed its closest substitute for many customers, 
Nalco

[[Page 23294]]

would be aware that many customers now have a stronger preference for 
it as a supplier, allowing Nalco to raise prices above pre-acquisition 
levels, relax its service standards, and scale back its efforts to 
innovate. Deepwater PCMS providers in the Gulf that lack an established 
track record and experienced personnel are not invited to bid on many 
projects.

VI. Entry and Efficiencies

    35. Entry by a new PCMS service provider or expansion of existing 
marginal suppliers would not be timely, likely, and sufficient to 
prevent the substantial lessening of competition caused by the 
elimination of Champion as an independent competitor.
    36. Successful entry into the provision of deepwater PCMS in the 
Gulf is difficult, costly, and time consuming. To compete, a deepwater 
PCMS supplier must have local infrastructure, a full line of production 
chemicals designed for deepwater use, experienced staff, and a track 
record of successfully treating deepwater wells in the Gulf. Because of 
the significant investment E&P companies make in deepwater wells and 
the high costs of any problem or delay, these firms disfavor the risks 
of using new suppliers or switching between established suppliers, 
making it difficult for new PCMS providers to enter the market or grow 
their business.
    37. Developing a track record of successfully treating deepwater 
wells in the Gulf is arduous and takes substantial time. E&P companies 
typically avoid the cost and delay involved in evaluating and 
monitoring a new supplier unless the existing supplier exhibits poor 
performance over a long period of time. Additionally, many E&P 
companies refuse to be the first customer to use a new deepwater PCMS 
provider, while others will only use a deepwater PCMS provider after 
the provider has developed a track record over a number of years.
    38. A potential entrant may also face problems acquiring sufficient 
manpower to expand its business or enter at all. E&P companies require 
deepwater PCMS providers to commit a number of personnel with 
significant deepwater experience to the well, and also expect the 
provider to staff its laboratories and R&D facilities with deepwater 
experts. It takes existing deepwater PCMS providers years to train 
employees before they can accumulate deepwater experience and 
expertise.
    39. Defendants cannot demonstrate cognizable and merger-specific 
efficiencies that would be sufficient to offset the transaction's 
anticompetitive effects.

VII. Violation Alleged

    40. The effect of Ecolab's proposed acquisition of Permian if it 
were consummated, would likely be to lessen substantially competition 
for deepwater PCMS in the Gulf in violation of Section 7 of the Clayton 
Act, 15 U.S.C. 18. Unless restrained, the transaction would likely have 
the following effects, among others:
    (a) Competition in the market for deepwater PCMS in the Gulf would 
be substantially lessened;
    (b) prices for deepwater PCMS in the Gulf would increase;
    (c) the quality of deepwater PCMS services in the Gulf would 
decrease; and
    (d) innovation in the deepwater PCMS market in the Gulf would 
diminish.

VIII. Requested Relief

    41. Plaintiff requests that this Court:
    (a) Adjudge Ecolab's proposed acquisition of Permian to violate 
Section 7 of the Clayton Act, 15 U.S.C. 18;
    (b) Permanently enjoin and restrain Defendants from consummating 
the proposed acquisition by Ecolab of Permian or from entering into or 
carrying out any contract, agreement, plan, or understanding, the 
effect of which would be to combine Ecolab and Permian;
    (c) Award the United States its costs for this action; and
    (d) Award the United States such other and further relief as the 
Court deems just and proper.

Dated: April 8, 2013.

    Respectfully submitted,

FOR PLAINTIFF UNITED STATES:

----/s/------
Leslie C. Overton (DC Bar 454493)
Acting Assistant Attorney General

----/s/------
Patricia A. Brink
Director of Civil Enforcement

----/s/------
William H. Stallings (DC Bar 444924)
Chief, Transportation, Energy & Agriculture Section

----/s/------
Kathleen S. O'Neill
Assistant Chief, Transportation, Energy & Agriculture Section
    Respectfully submitted,

David E. Altschuler (DC Bar 983023)
Jade Alice Eaton (DC Bar 939629)
Tracy Fisher
Andrew S. Garver
Michelle Livingston (DC Bar 461268)
Jill Ptacek

Trial Attorneys, U.S. Department of Justice, Antitrust Division, 
Transportation, Energy & Agriculture Section, 450 5th Street, NW., 
Suite 8000, Washington, DC 20001, Telephone: (202) 532-4713, 
Facsimile: (202) 616-2441, [email protected].
----/s/------
Katherine A. Celeste

United States District Court, District of Columbia

UNITED STATES OF AMERICA, Plaintiff, v.
ECOLAB INC., and PERMIAN MUD SERVICE, INC., Defendants.

Case No.: Case 1:13-cv-00444.
FILED: 04/08/2013.

Competitive Impact Statement

    Plaintiff United States of America (``United States''), pursuant to 
Section 2(b) of the Antitrust Procedures and Penalties Act (``APPA'' or 
``Tunney Act''), 15 U.S.C. 16(b)-(h), files this Competitive Impact 
Statement relating to the proposed Final Judgment submitted for entry 
in this civil antitrust proceeding.

I. Nature and Purpose of the Proceeding

    Defendant Ecolab Inc. (``Ecolab'') and Defendant Permian Mud 
Service, Inc. (``Permian'') entered into an Agreement and Plan of 
Merger, dated October 11, 2012, pursuant to which Ecolab would acquire 
Permian (``proposed transaction''). Ecolab's wholly-owned subsidiary, 
Nalco Company (``Nalco'') and Permian's wholly-owned subsidiary, 
Champion Technologies, Inc. (``Champion''), compete head-to-head to 
provide production chemical management services for oil and gas wells 
drilled in over 1,000 feet of water (``deepwater PCMS'') in the United 
States Gulf of Mexico (``Gulf''). Nalco and Champion are the two 
leading providers of deepwater PCMS in the Gulf and together control 
over 70% of the market.
    The United States filed a civil antitrust Complaint on April 8, 
2013, seeking to enjoin Ecolab's acquisition of Permian. The Complaint 
alleges that the proposed transaction is likely to lessen competition 
substantially for deepwater PCMS in the Gulf in violation of Section 7 
of the Clayton Act, 15 U.S.C. 18. This loss of competition is likely to 
lead to higher prices, reduced service quality, and diminished 
innovation for deepwater PCMS in the Gulf.
    At the same time the Complaint was filed, the United States filed a 
Hold Separate Stipulation and Order (``Hold Separate'') and proposed 
Final Judgment, which are designed to eliminate the anticompetitive 
effects of the transaction. Under the proposed Final Judgment, the 
terms of which are explained more fully below, Ecolab is required to 
divest a package of assets that Champion has been using to

[[Page 23295]]

provide deepwater PCMS in the Gulf. Under the terms of the Hold 
Separate Stipulation and Order, Ecolab will take certain steps to 
ensure that Champion is operated as a competitively independent, 
economically viable and ongoing business concern, that competition is 
maintained during the pendency of the ordered divestiture, and that the 
divestiture assets are preserved and maintained.
    The United States and Defendants have stipulated that the proposed 
Final Judgment may be entered after compliance with the APPA. Entry of 
the proposed Final Judgment would terminate this action, except that 
the Court would retain jurisdiction to construe, modify, or enforce the 
provisions of the proposed Final Judgment and to punish violations 
thereof.

II. Description of the Events Giving Rise to the Alleged Violation

A. The Defendants and the Industry

    Ecolab provides products and services to the energy, foodservice, 
and healthcare, industries. Nalco, its wholly-owned subsidiary, 
supplies the oil and gas industry with deepwater PCMS through its 
Energy Services Division, which generated $1.87 billion in revenues in 
2011. Nalco is currently the largest provider of deepwater PCMS in the 
Gulf.
    Permian provides specialty chemicals and services to the oil and 
gas industry through its subsidiaries, which jointly generated $1.25 
billion in revenues in 2011. Permian supplies deepwater PCMS through 
its wholly-owned subsidiary, Champion, which is currently the second 
largest provider of deepwater PCMS in the Gulf.
    Deepwater PCMS providers treat deepwater oil and gas wells with 
blends of chemicals that prevent naturally occurring material, such as 
scale, paraffin, and hydrates, from blocking the flow of hydrocarbons 
to the production platform; protect well infrastructure and equipment 
from corrosion and damage; enable efficient separation of the mix of 
oil, water, and gas produced by the well; and remove or neutralize 
unwanted substances, such as hydrogen sulfide gas, from the production.
    Oil and gas exploration and production companies (``E&P 
companies''), who own and operate oil and gas wells, must purchase 
production chemical management services to safely and efficiently 
produce oil and gas from onshore, shallow water, and deepwater wells 
(those drilled in over 1,000 feet of water). However, the complex 
infrastructure of deepwater wells often requires deepwater PCMS 
providers to develop solutions that are generally unnecessary onshore 
or in shallow water. For instance, due to the time and expense required 
to construct a new production platform in deepwater, E&P companies 
frequently opt to build deepwater ``subsea wells,'' which can connect 
to existing offshore production platforms up to 70 miles away, instead 
of ``dry-tree'' wells, which must be stationed very close to the 
production platform.
    To service these wells, deepwater PCMS providers must deliver 
chemicals through ``umbilicals,'' which are clusters of extremely 
narrow chemical injection, hydraulic, and fiber-optic lines that extend 
from the production platform to the well. Because of the complexities 
of this delivery system and the expense of repairing a chemical line 
clogged by impure or unstable chemicals, E&P companies impose strict 
qualification and quality control requirements on chemicals 
administered through umbilicals.
    Strings of narrow piping called ``flow lines'' transport oil and 
gas from a subsea well to the production platform. Because flow lines 
run along the seafloor, they expose the produced oil, water, and gas to 
cold temperatures that cause solids to form and block the flow line. 
Deepwater PCMS providers must specially formulate chemicals for 
deepwater subsea wells that inhibit the formation or accumulation of 
solids during prolonged exposure to seafloor temperatures.
    In addition to these operational complexities, deepwater wells 
often present challenging production issues stemming from the high 
pressures and temperatures common in such wells. Each deepwater well 
has unique characteristics, which PCMS providers must assess to 
identify production challenges and develop an appropriate treatment 
plan. Deepwater wells also typically contain large reserves and are 
more expensive to repair than onshore or shallow water wells.
    For these reasons, most E&P companies operating deepwater wells are 
extremely risk-averse and seek out PCMS providers and personnel with 
Gulf-specific deepwater experience and expertise to service their 
wells. They also typically require deepwater PCMS providers to have 
more sophisticated laboratories, research and development (``R&D'') 
programs, and supply chain and quality control operations than onshore 
or shallow water PCMS providers.

B. The Competitive Effects of the Transaction in the Market for 
Deepwater PCMS in the Gulf

1. The Provision of Deepwater PCMS Is a Relevant Product Market
    The United States alleges that the provision of deepwater PCMS is a 
line of commerce and a relevant market within the meaning of Section 7 
of the Clayton Act. E&P companies are unlikely to forego use of PCMS 
providers or switch to PCMS providers that only have experience onshore 
or in shallow water in response to a small but significant and non-
transitory increase in deepwater PCMS prices.
    The risks of not using a PCMS provider, or using a PCMS provider 
without deepwater operations or experience, greatly outweigh the 
potential cost savings. Deepwater PCMS represent a fraction of the 
overall cost of producing oil and gas from a deepwater well, but 
improper deepwater PCMS treatment can cost an E&P company millions in 
lost production or compromise the well's infrastructure. As a result, 
E&P companies are unlikely to forego use of PCMS providers or switch to 
PCMS providers that only have experience onshore or in shallow water in 
response to a small but significant and non-transitory increase in 
deepwater PCMS prices.
    Deepwater PCMS are not reasonably interchangeable with onshore or 
shallow water PCMS. Because deepwater basins have unique 
characteristics and well infrastructure, providers of onshore or 
shallow water PCMS typically do not have the relevant know-how and 
experience required to effectively treat deepwater wells. Although 
there are some subsea wells in shallow water, they are typically closer 
to the production platform than deepwater subsea wells, so the 
operational difficulties engendered by umbilicals and flow lines are 
often less severe in shallow water. Additionally, the geological 
characteristics of shallow-water areas of the Gulf differ from its 
deepwater areas, so PCMS providers active in shallow water do not have 
the same familiarity or experience with the formation rocks or 
hydrocarbons found in deepwater. Importantly, because deepwater 
operations differ, onshore and shallow water PCMS providers also 
typically lack a complete suite of chemicals that can tolerate 
umbilical injection or the high pressures and temperatures typically 
found in deepwater wells and generally do not have the necessary lab 
and filtration equipment to develop and qualify a chemical for 
umbilical injection or deepwater use.

[[Page 23296]]

2. The United States Gulf of Mexico Is a Relevant Geographic Market
    The United States Gulf of Mexico is a relevant geographic market 
for the provision of deepwater PCMS under Section 7 of the Clayton Act. 
E&P companies operating in the Gulf are unlikely to switch to a PCMS 
provider without local infrastructure or Gulf-specific deepwater 
experience and expertise in the event of a small but significant and 
non-transitory increase in price.
    E&P companies operating deepwater wells in the Gulf require their 
PCMS suppliers to have local infrastructure, such as distribution 
centers, blending facilities, analytical laboratories, and sales and 
technical personnel, so that the PCMS provider can have the resources 
it needs nearby to monitor the well and quickly address production 
challenges. These E&P companies will not select a deepwater PCMS 
provider that lacks the Gulf-based infrastructure necessary to 
effectively service the E&P companies' projects.
    Although experience in another deepwater basin may be relevant to 
deepwater Gulf operations, each deepwater basin presents unique 
production challenges resulting from its unique combination of 
hydrocarbons, produced water, and geological characteristics. PCMS 
providers operating in other deepwater basins are unlikely to have the 
depth of experience with the particular production challenges that 
frequently affect deepwater wells in the Gulf. E&P companies are 
unlikely to entrust their wells to PCMS providers without this 
essential experience.
3. The Anticompetitive Effects of the Proposed Transaction
    The market for the provision of deepwater PCMS in the Gulf is 
highly concentrated and would become more concentrated as a result of 
the proposed transaction. Based on 2012 revenues, a combined Champion 
and Nalco would control 70% of the market for deepwater PCMS in the 
Gulf.
    The proposed transaction would eliminate the significant head-to-
head competition between Nalco and Champion to provide deepwater PCMS 
in the Gulf. Nalco and Champion frequently compete for the same 
deepwater opportunities in the Gulf. They have spurred each other to 
develop and improve products, performance and technology, and customers 
have benefitted from this competition.
    Nalco's acquisition of Champion would eliminate many customers' 
preferred alternative to Nalco and reduce the number of preferred or 
capable bidders on many projects from three to two. Post-acquisition, 
Nalco would gain the incentive and ability to profitably raise its bid 
prices significantly above pre-acquisition levels, reduce its 
investment in R&D, or provide lower levels of service.
4. Entry and Expansion Are Unlikely To Prevent the Competitive Effects 
of the Proposed Transaction
    Entry by a new PCMS service provider or expansion of existing 
suppliers would not be timely, likely, and sufficient to prevent the 
substantial lessening of competition caused by the elimination of 
Champion as an independent competitor.
    Successful entry into the provision of deepwater PCMS in the Gulf 
is difficult, costly, and time-consuming. To compete, a deepwater PCMS 
supplier must have local infrastructure, a full line of production 
chemicals designed for deepwater use, experienced staff, and a track 
record of successfully treating deepwater wells in the Gulf. Because of 
the significant investment E&P companies make in deepwater wells and 
the high costs of any problem or delay, these firms disfavor using new 
suppliers or switching between established suppliers, making it 
difficult for new deepwater PCMS providers to enter the market or grow 
their business.
    Developing a track record of successfully treating deepwater wells 
in the Gulf is arduous and takes substantial time. E&P companies 
typically avoid the cost and delay involved in evaluating and 
monitoring a new supplier unless the existing supplier exhibits poor 
performance over a long period of time. Additionally, many E&P 
companies refuse to be the first customer to use a new deepwater PCMS 
provider, while others will only use a deepwater PCMS provider after 
the provider has developed a track record over a number of years.
    A new deepwater PCMS provider may also face challenges acquiring 
sufficient manpower to expand its business or enter at all. E&P 
companies require deepwater PCMS providers to commit a number of 
personnel with significant deepwater experience to the well, and also 
expect the provider to staff its laboratories and R&D facilities with 
deepwater experts. It takes existing deepwater PCMS providers years to 
train employees before they can accumulate deepwater experience and 
expertise.

III. Explanation of the Proposed Final Judgment

    The proposed Final Judgment will eliminate the likely 
anticompetitive effects of the merger in the market for deepwater PCMS 
in the Gulf by establishing a new, independent, and economically viable 
competitor. The package of divestiture assets provides the acquirer 
with the assets it needs to establish a significant presence in the 
Gulf and become an effective competitor, including the tangible and 
intangible assets that Champion currently uses to provide PCMS to 
deepwater wells in the Gulf, the option to acquire Champion's storage, 
distribution, filtration, and quality control facility in Broussard, 
Louisiana, and a short-term chemical supply agreement that will allow 
the acquirer to immediately begin supplying Champion customers with the 
production chemicals they currently use and trust. In addition, because 
experienced personnel are critical to success in the deepwater PCMS 
business in the Gulf--and will be even more important to a new entrant 
seeking to secure the trust and business of risk-averse customers--the 
divestiture package provides the acquirer with an expansive right to 
hire relevant Champion personnel without interference from the merged 
firm.

A. Identification of an Upfront Buyer

    The overriding goal of the proposed Final Judgment is to provide 
the acquirer with everything it needs to effectively compete to provide 
deepwater PCMS in the Gulf. Where possible, the United States favors 
the divestiture of an existing business unit that has already 
demonstrated its ability to compete in the relevant market. In this 
case, however, neither Defendant has a standalone deepwater PCMS 
business in the Gulf. Rather, the employees, facilities, and other 
assets relating to the Defendants' deepwater PCMS operations in the 
Gulf are deeply intertwined with the Defendants' PCMS operations in 
other regions and other business lines. To ensure that the acquirer 
will have all assets necessary to be an effective, long-term 
competitor, while minimizing disruption to Defendants' broader 
operations, the proposed Final Judgment assembles a set of assets that 
will enable the acquirer to effectively preserve competition.
    As explained in the Antitrust Division Policy Guide to Merger 
Remedies, the Antitrust Division may require an upfront buyer when a 
divestiture package is less than an existing business

[[Page 23297]]

entity.\2\ Here, Defendants have identified Clariant Corporation and 
its parent, Clariant International Ltd. (collectively, ``Clariant''), 
as an upfront buyer for the divestiture package. Clariant International 
Ltd. is a Swiss corporation that develops, produces, and markets 
chemicals for a variety of industries around the world. Clariant's Oil 
& Mining Services Group, headquartered in Houston, Texas, provides PCMS 
throughout the world. Clariant is the fourth largest PCMS provider 
globally and has significant deepwater PCMS experience outside the 
Gulf. Its ability to successfully manage a deepwater PCMS business in 
other regions provides confidence that with the divestiture package, it 
will be able to do so in the Gulf. Clariant has targeted the deepwater 
PCMS market in the Gulf as an area for growth, and recently built a 
state-of-the-art deepwater PCMS laboratory in The Woodlands, Texas. For 
these reasons, the United States has concluded that Clariant has the 
intent and capability, as a result of this settlement, to be an 
effective competitor in the provision of deepwater PCMS in the Gulf and 
is an acceptable acquirer of the divestiture assets. Therefore, the 
proposed Final Judgment designates Clariant as the Acquirer.\3\
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    \2\ U.S. Department of Justice, Antitrust Division Policy Guide 
to Merger Remedies (June 2011), available at http://www.justice.gov/atr/public/guidelines/272350.pdf. (Identifying an upfront buyer 
provides greater assurance that the divestiture package contains the 
assets needed to create a viable entity that will preserve 
competition.).
    \3\ The proposed Final Judgment provides for an alternative sale 
should a problem arise with the upfront buyer. If the Defendants 
fail to divest the Divestiture Assets to Clariant within ten days of 
the Court signing the Hold Separate Stipulation and Order in this 
matter, the United States may request that the Court appoint a 
trustee to sell the Divestiture assets. The trustee may sell the 
Divestiture Assets to an acquirer acceptable to the United States.
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B. The Divestiture Package

    The divestiture package, which is fully described in the proposed 
Final Judgment, includes, among other things, Champion deepwater 
chemicals and know-how, a broad right to hire, the tangible and 
intangible assets Champion currently uses to serve customers in the 
Gulf, and additional rights and options designed to transfer know-how 
and customer accounts to the acquirer, which are discussed in more 
detail below.
1. Champion Deepwater Chemicals and Know-How
    The proposed Final Judgment transfers to the acquirer the chemical 
formulations and know-how that allow Champion to successfully compete 
for deepwater PCMS opportunities in the Gulf. Going forward, the 
acquirer will have exclusive rights in the Gulf to provide the chemical 
formulations that Champion's current customers use and trust, and the 
know-how needed to apply these formulations effectively to current and 
future projects.
    Defendants use a variety of specially-formulated chemical solutions 
to provide deepwater PCMS in the Gulf. Although many of the raw 
chemicals used in these blends are manufactured by third parties, each 
deepwater PCMS provider in the Gulf has its own unique formulations and 
know-how relating to the blending and use of these chemicals. These 
formulations and know-how represent an important qualitative aspect of 
the deepwater PCMS provided by the Defendants.
    Established PCMS providers routinely rely on case histories and 
past performance data to identify the best chemical formulation for a 
new project and demonstrate its suitability to prospective customers. 
New entrants can only offer chemical formulations without a track 
record of success or wealth of instructive data points. The divestiture 
package gives the acquirer the ability to offer tried and true chemical 
formulations, which are expected to reduce customers' aversion to 
trying a new deepwater PCMS provider.
    The proposed Final Judgment provides the acquirer with a patent for 
Champion's most lucrative production chemical in the Gulf, a low dose 
hydrate inhibitor critical to many E&P companies' operations in the 
deepwater Gulf, and exclusive licenses within the deepwater Gulf for 
all other production chemicals used by Champion in the Gulf.\4\ It also 
provides the acquirer with the know-how and other intangible assets 
(e.g., case histories, formulations, product bulletins, and 
manufacturing instructions) needed to effectively make and apply these 
production chemicals.
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    \4\ Champion uses these production chemicals to support other 
product lines (e.g., onshore PCMS) and other geographic regions, and 
Clariant, the likely acquirer, already has a full suite of 
production chemicals that it uses in other regions and for other 
applications. Therefore, the Division has determined that it is 
appropriate in this case for Defendants to retain rights to use 
these production chemicals outside the Gulf. See Antitrust Division 
Policy Guide to Merger Remedies, at 11 n. 23 (``When a patent covers 
the right to compete in multiple product or geographic markets, yet 
the merger adversely affects competition in only a subset of these 
markets, the Division will insist on the sale or license of rights 
necessary to effectively preserve competition in the affected 
markets. In some cases, this may require that the purchaser or 
licensee obtain the rights to produce and sell only the relevant 
product.'').
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2. Right To Hire
    The proposed Final Judgment provides the acquirer with an expansive 
right to hire all Champion employees whose job responsibilities relate 
to the provision of deepwater PCMS in the Gulf. As discussed above, the 
provision of deepwater PCMS is a service business in which customers 
place great weight on the expertise, know-how and experience of the 
individuals working on their accounts. The acquirer's right to hire 
Champion personnel with deepwater PCMS experience in the Gulf will 
provide the acquirer with the qualified employees it needs to serve 
Champion's existing accounts and compete for new projects.
    The proposed Final Judgment contains numerous provisions to 
facilitate the acquirer's ability to hire and retain these employees. 
The Defendants will provide the acquirer with detailed information 
about each relevant employee, including his or her responsibilities, 
job titles, past deepwater PCMS experience in the Gulf, education, 
training, and salary. The Defendants also will grant the acquirer 
reasonable access to employees and the ability to interview them. The 
Defendants are specifically prohibited from interfering with the 
acquirer's negotiations to hire any relevant employee. For example, if 
an employee agrees to work for the acquirer, the Defendants must vest 
such employees' unvested pensions or other equity rights. Importantly, 
the Defendants must also waive any applicable non-compete or non-
disclosure agreement covering information related to the divestiture 
assets so that the employee may freely provide services to the acquirer 
and its customers. To allow the acquirer time to develop the business 
without the risk of Defendants targeting relevant employees to 
undermine the divestiture, the Defendants are also prohibited for a 
period of time from soliciting to hire or hiring any relevant employee 
that is hired by the acquirer.
3. Broussard Facility and Laboratory Equipment
    The proposed Final Judgment grants the acquirer the option to 
purchase certain facilities and lab equipment that Champion uses in 
connection with its deepwater PCMS Gulf business. These optional 
divestiture assets include Champion's Broussard, Louisiana warehouse 
and distribution facility, which also contains chemical filtration 
equipment and a quality control laboratory; Champion laboratory

[[Page 23298]]

equipment used in providing deepwater PCMS; and tangible assets used to 
provide deepwater PCMS to any customer that elects to transition its 
contract or business to the acquirer. Customers prefer PCMS providers 
to have facilities and equipment close to the Gulf. Some potential 
acquirers--such as Clariant--already have similar facilities. The Final 
Judgment preserves maximum flexibility by granting the acquirer the 
option to secure the Champion facilities and equipment it needs to 
compete, without forcing it to purchase assets that are duplicative of 
its existing operations.
4. Supply of Chemicals
    The proposed Final Judgment grants to the acquirer an option to 
enter into a short-term supply agreement with the Defendants for 
chemicals licensed or divested to the acquirer. This provision will 
provide the acquirer with a trusted supply chain while it makes 
arrangements to produce such chemicals in-house or obtain them from 
other manufacturers. The supply agreement will assure customers that 
they will receive the same chemicals from the acquirer that they are 
currently receiving from Champion.
    The proposed Final Judgment does not require divestiture of 
Defendants' chemical manufacturing plants, which are substantial 
facilities that support their broader PCMS operations and have 
significantly more capacity than an acquirer would need to produce 
production chemicals for the deepwater Gulf.\5\ Clariant has 
manufacturing capabilities that it can dedicate to production of 
chemicals for deepwater Gulf applications. Moreover, many chemical 
intermediates that are used to produce the finished production chemical 
are widely available commodities.
---------------------------------------------------------------------------

    \5\ Each of the Defendants' manufacturing facilities contains a 
variety of vessels capable of performing distinct chemical 
reactions. No manufacturing plant is capable of performing all of 
the chemical reactions needed to manufacture a full suite of 
deepwater suitable chemicals. As a result, it is not possible to 
allocate a portion of a single plant to the Acquirer.
---------------------------------------------------------------------------

5. Customer Transfer
    The proposed Final Judgment contains provisions designed to 
facilitate the transfer of current customer contracts to provide 
deepwater PCMS in the Gulf from Champion to the acquirer. In a typical 
divestiture of a line of business, the ongoing customer contracts 
usually will transfer with the business unit being divested. Here, 
there is no line of business being divested and contracts cannot be 
assigned without customer consent. To encourage customers to transition 
their business to the acquirer, the proposed Final Judgment contains 
certain incentives. For example, as discussed above, the acquirer will 
have the exclusive right to provide the chemicals Champion is currently 
providing deepwater PCMS customers in the Gulf, and access to the know-
how and employees that currently allow Champion to provide deepwater 
PCMS to customers in the Gulf. As such, the acquirer will be able to 
step into Champion's shoes and continue to provide ongoing services to 
customers.
    In addition, the proposed Final Judgment requires that the 
Defendants use their ``best efforts'' to convince customers to move 
their business to the acquirer. As a way of assuring customers that 
such a transition will be smooth, the proposed Final Judgment permits 
the acquirer to purchase the tangible assets used to provide PCMS to 
any customer that elects to transition its contract or business to the 
acquirer. At the option of the acquirer, the Defendants also must 
provide transitional services sufficient to meet the acquirer's needs 
for assistance in matters relating to the design, manufacture, 
formulation, testing, provision, or application of production chemicals 
for any customer. This provision will allow the acquirer broad access 
to Champion know-how or expertise related to its provision of deepwater 
PCMS in the Gulf not ascertainable through its divestiture of case 
histories and other intangible assets. Deepwater PCMS providers 
commonly cooperate to prevent operational challenges when a customer 
chooses a new provider to manage a platform or well. The proposed Final 
Judgment gives the acquirer the option of requesting additional 
assistance when taking over Champion's existing accounts.\6\
---------------------------------------------------------------------------

    \6\ Should a customer elect not to move its business to the 
acquirer, the proposed Final Judgment provides that Champion may 
continue to service that customer's business for a limited period of 
six months (extendable up to a total of one year at the sole 
discretion of the United States upon a showing of good cause).
---------------------------------------------------------------------------

C. Procedures

    The proposed Final Judgment requires Defendants to divest to 
Clariant the divestiture assets within 10 days after the Court signs 
the Hold Separate Stipulation and Order in this matter. The assets must 
be divested in such a way as to satisfy the United States, in its sole 
discretion, that the assets can and will used by the purchaser to 
compete effectively in the relevant market. Defendants must take all 
reasonable steps necessary to accomplish the divestiture quickly and 
must cooperate with the Acquirer.
    In the event that Defendants do not accomplish the divestiture 
within the prescribed periods, the proposed Final Judgment provides 
that upon application by the United States, the Court will appoint a 
trustee selected by the United States to effect the divestiture. If a 
trustee is appointed, the proposed Final Judgment provides that 
Defendants will pay all of the trustee's costs and expenses. The 
trustee will have the authority to divest the divestiture assets to an 
acquirer acceptable to the United States. The trustee's commission will 
be structured so as to provide an incentive for the trustee based on 
the price obtained and the speed with which the divestiture is 
accomplished. After his or her appointment becomes effective, the 
trustee will file monthly reports with the Court and the United States 
setting forth his or her efforts to accomplish the divestiture. At the 
end of six (6) months, if the divestiture has not been accomplished, 
the trustee will make recommendations to the Court, which shall enter 
such orders as appropriate, in order to carry out the purpose of the 
trust, including extending the trust or the term of the trustee's 
appointment.

IV. Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment will neither 
impair nor assist the bringing of any private antitrust damage action. 
Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 
16(a), the proposed Final Judgment has no prima facie effect in any 
subsequent private lawsuit that may be brought against Defendants.

V. Procedures Available for Modification of the Proposed Final Judgment

    The United States and Defendants have stipulated that the proposed 
Final Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the United States has not 
withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least sixty (60) days preceding 
the

[[Page 23299]]

effective date of the proposed Final Judgment within which any person 
may submit to the United States written comments regarding the proposed 
Final Judgment. Any person who wishes to comment should do so within 
sixty (60) days of the date of publication of this Competitive Impact 
Statement in the Federal Register, or the last date of publication in a 
newspaper of the summary of this Competitive Impact Statement, 
whichever is later. All comments received during this period will be 
considered by the United States Department of Justice, which remains 
free to withdraw its consent to the proposed Final Judgment at any time 
prior to the Court's entry of judgment. The comments and the response 
of the United States will be filed with the Court. In addition, 
comments will be posted on the U.S. Department of Justice, Antitrust 
Division's Internet Web site and, under certain circumstances, 
published in the Federal Register.
    Written comments should be submitted to:

William H. Stallings, Chief, Transportation, Energy & Agriculture 
Section, Antitrust Division, United States Department of Justice, 450 
Fifth Street NW., Suite 8000, Washington, DC 20530.

    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

    The United States considered, as an alternative to the proposed 
Final Judgment, a full trial on the merits against the Defendants. The 
United States could have continued the litigation and sought 
preliminary and permanent injunctions against Ecolab's acquisition of 
certain Champion assets. The United States is satisfied, however, that 
the divestiture of assets described in the proposed Final Judgment will 
preserve competition for the provision of deepwater PCMS in the Gulf, 
the relevant market identified by the United States. Thus, the proposed 
Final Judgment would achieve all or substantially all of the relief the 
United States would have obtained through litigation, but avoids the 
time, expense, and uncertainty of a full trial on the merits of the 
Complaint.

VII. Standard of Review Under the APPA for the Proposed Final Judgment

    The Clayton Act, as amended by the APPA, requires that proposed 
consent judgments in antitrust cases brought by the United States be 
subject to a sixty-day comment period, after which the court shall 
determine whether entry of the proposed Final Judgment ``is in the 
public interest.'' 15 U.S.C. 16(e)(1). In making that determination, 
the court, in accordance with the statute as amended in 2004, is 
required to consider:

    (A) The competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration of relief sought, anticipated effects of 
alternative remedies actually considered, whether its terms are 
ambiguous, and any other competitive considerations bearing upon the 
adequacy of such judgment that the court deems necessary to a 
determination of whether the consent judgment is in the public 
interest; and
    (B) the impact of entry of such judgment upon competition in the 
relevant market or markets, upon the public generally and 
individuals alleging specific injury from the violations set forth 
in the complaint including consideration of the public benefit, if 
any, to be derived from a determination of the issues at trial.

    15 U.S.C. 16(e)(1)(A) & (B). In considering these statutory 
factors, the court's inquiry is necessarily a limited one as the 
government is entitled to ``broad discretion to settle with the 
defendant within the reaches of the public interest.'' United States v. 
Microsoft Corp., 56 F.3d 1448, 1461 (DC Cir. 1995); see generally 
United States v. SBC Commc'ns, Inc., 489 F. Supp. 2d 1 (D.D.C. 2007) 
(assessing public interest standard under the Tunney Act); United 
States v. InBev N.V./S.A., 2009-2 Trade Cas. (CCH) ] 76,736, 2009 U.S. 
Dist. LEXIS 84787, No. 08-1965 (JR), at *3, (D.D.C. Aug. 11, 2009) 
(noting that the court's review of a consent judgment is limited and 
only inquires ``into whether the government's determination that the 
proposed remedies will cure the antitrust violations alleged in the 
complaint was reasonable, and whether the mechanism to enforce the 
final judgment are clear and manageable.'').\7\
---------------------------------------------------------------------------

    \7\ The 2004 amendments substituted ``shall'' for ``may'' in 
directing relevant factors for court to consider and amended the 
list of factors to focus on competitive considerations and to 
address potentially ambiguous judgment terms. Compare 15 U.S.C. 
16(e) (2004), with 15 U.S.C. 16(e)(1) (2006); see also SBC Commc'ns, 
489 F. Supp. 2d at 11 (concluding that the 2004 amendments 
``effected minimal changes'' to Tunney Act review).
---------------------------------------------------------------------------

    As the United States Court of Appeals for the District of Columbia 
Circuit has held, under the APPA a court considers, among other things, 
the relationship between the remedy secured and the specific 
allegations set forth in the government's complaint, whether the decree 
is sufficiently clear, whether enforcement mechanisms are sufficient, 
and whether the decree may positively harm third parties. See 
Microsoft, 56 F.3d at 1458-62. With respect to the adequacy of the 
relief secured by the decree, a court may not ``engage in an 
unrestricted evaluation of what relief would best serve the public.'' 
United States v. BNS, Inc., 858 F.2d 456, 462 (9th Cir. 1988) (citing 
United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see 
also Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152 
F. Supp. 2d 37, 40 (D.D.C. 2001); InBev, 2009 U.S. Dist. LEXIS 84787, 
at *3. Courts have held that:

[t]he balancing of competing social and political interests affected 
by a proposed antitrust consent decree must be left, in the first 
instance, to the discretion of the Attorney General. The court's 
role in protecting the public interest is one of insuring that the 
government has not breached its duty to the public in consenting to 
the decree. The court is required to determine not whether a 
particular decree is the one that will best serve society, but 
whether the settlement is ``within the reaches of the public 
interest.'' More elaborate requirements might undermine the 
effectiveness of antitrust enforcement by consent decree.

Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\8\ In 
determining whether a proposed settlement is in the public interest, a 
district court ``must accord deference to the government's predictions 
about the efficacy of its remedies, and may not require that the 
remedies perfectly match the alleged violations.'' SBC Commc'ns, 489 F. 
Supp. 2d at 17; see also Microsoft, 56 F.3d at 1461 (noting the need 
for courts to be ``deferential to the government's predictions as to 
the effect of the proposed remedies''); United States v. Archer-
Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (noting that 
the court should grant due respect to the United States' prediction as 
to the effect of proposed remedies, its perception of the market 
structure, and its views of the nature of the case).
---------------------------------------------------------------------------

    \8\ Cf. BNS, 858 F.2d at 464 (holding that the court's 
``ultimate authority under the [APPA] is limited to approving or 
disapproving the consent decree''); United States v. Gillette Co., 
406 F. Supp. 713, 716 (D. Mass. 1975) (noting that, in this way, the 
court is constrained to ``look at the overall picture not 
hypercritically, nor with a microscope, but with an artist's 
reducing glass''). See generally Microsoft, 56 F.3d at 1461 
(discussing whether ``the remedies [obtained in the decree are] so 
inconsonant with the allegations charged as to fall outside of the 
`reaches of the public interest''').

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[[Page 23300]]

    Courts have greater flexibility in approving proposed consent 
decrees than in crafting their own decrees following a finding of 
liability in a litigated matter. ``[A] proposed decree must be approved 
even if it falls short of the remedy the court would impose on its own, 
as long as it falls within the range of acceptability or is `within the 
reaches of public interest.''' United States v. Am. Tel. & Tel. Co., 
552 F. Supp. 131, 151 (D.D.C. 1982) (citations omitted) (quoting United 
States v. Gillette Co., 406 F. Supp. 713, 716 (D. Mass. 1975)), aff'd 
sub nom. Maryland v. United States, 460 U.S. 1001 (1983); see also 
United States v. Alcan Aluminum Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 
1985) (approving the consent decree even though the court would have 
imposed a greater remedy). To meet this standard, the United States 
``need only provide a factual basis for concluding that the settlements 
are reasonably adequate remedies for the alleged harms.'' SBC Commc'ns, 
489 F. Supp. 2d at 17.
    Moreover, the court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its Complaint, and does not authorize the court to 
``construct [its] own hypothetical case and then evaluate the decree 
against that case.'' Microsoft, 56 F.3d at 1459; see also InBev, 2009 
U.S. Dist. LEXIS 84787, at *20 (``the `public interest' is not to be 
measured by comparing the violations alleged in the complaint against 
those the court believes could have, or even should have, been 
alleged''). Because the ``court's authority to review the decree 
depends entirely on the government's exercising its prosecutorial 
discretion by bringing a case in the first place,'' it follows that 
``the court is only authorized to review the decree itself,'' and not 
to ``effectively redraft the complaint'' to inquire into other matters 
that the United States did not pursue. Microsoft, 56 F.3d at 1459-60. 
As this Court confirmed in SBC Communications, courts ``cannot look 
beyond the complaint in making the public interest determination unless 
the complaint is drafted so narrowly as to make a mockery of judicial 
power.'' SBC Commc'ns, 489 F. Supp. 2d at 15.
    In its 2004 amendments, Congress made clear its intent to preserve 
the practical benefits of utilizing consent decrees in antitrust 
enforcement, adding the unambiguous instruction that ``[n]othing in 
this section shall be construed to require the court to conduct an 
evidentiary hearing or to require the court to permit anyone to 
intervene.'' 15 U.S.C. 16(e)(2). The language wrote into the statute 
what Congress intended when it enacted the Tunney Act in 1974, as 
Senator Tunney explained: ``[t]he court is nowhere compelled to go to 
trial or to engage in extended proceedings which might have the effect 
of vitiating the benefits of prompt and less costly settlement through 
the consent decree process.'' 119 Cong. Rec. 24,598 (1973) (statement 
of Senator Tunney). Rather, the procedure for the public interest 
determination is left to the discretion of the court, with the 
recognition that the court's ``scope of review remains sharply 
proscribed by precedent and the nature of Tunney Act proceedings.'' SBC 
Commc'ns, 489 F. Supp. 2d at 11.\9\
---------------------------------------------------------------------------

    \9\ See United States v. Enova Corp., 107 F. Supp. 2d 10, 17 
(D.D.C. 2000) (noting that the ``Tunney Act expressly allows the 
court to make its public interest determination on the basis of the 
competitive impact statement and response to comments alone''); 
United States v. Mid-Am. Dairymen, Inc., 1977-1 Trade Cas. (CCH) ] 
61,508, at 71,980 (W.D. Mo. 1977) (``Absent a showing of corrupt 
failure of the government to discharge its duty, the Court, in 
making its public interest finding, should * * * carefully consider 
the explanations of the government in the competitive impact 
statement and its responses to comments in order to determine 
whether those explanations are reasonable under the 
circumstances.''); S. Rep. No. 93-298, 93d Cong., 1st Sess., at 6 
(1973) (``Where the public interest can be meaningfully evaluated 
simply on the basis of briefs and oral arguments, that is the 
approach that should be utilized.'').
---------------------------------------------------------------------------

VIII. Determinative Documents

    There are no determinative materials or documents within the 
meaning of the APPA that were considered by the United States in 
formulating the proposed Final Judgment.


    Dated: April 8, 2013.
    Respectfully submitted,

----/s/------
Katherine A. Celeste
Trial Attorney, U.S. Department of Justice, Antitrust Division, 
Transportation, Energy, and Agriculture, 450 5th Street NW.; Suite 
8000, Washington, DC 20530, Telephone: (202) 532-4713, Fax: (202) 
616-2441, Email: [email protected].

Certificate of Service

    I hereby certify that on April 8, 2013, I caused a copy of the 
foregoing Competitive Impact Statement, Complaint, proposed Final 
Judgment, Hold Separate Stipulation and Order, and Plaintiff United 
States' Explanation of Procedures for Entry of the Final Judgment to be 
served on counsel for defendants in this matter in the manner set forth 
below:

    By electronic mail:

Counsel for Defendant Ecolab Inc., John H. Lyons (DC Bar 
453191), Skadden, Arps, Slate, Meagher & Flom LLP & 
Affiliates, 1440 New York Ave. NW., Washington, DC 20005-2111, Tel: 
(202) 371-7333, Fax: (202) 661-0560;
Counsel for Permian Mud Service, Inc., Neil W. Imus (DC Bar  
394544), Vinson & Elkins LLP, 2200 Pennsylvania Avenue NW., Suite 500 
West, Washington, DC 20037, Tel: (202) 639-6675, Fax: (202) 879-8875.

----/s/------
Katherine Celeste, Department of Justice, Antitrust Division, 450 
Fifth Street NW., Suite 8000, Washington, DC 20001, Telephone: (202) 
532-4713, Facsimile: (202) 616-2441.

United States District Court for the District of Columbia

UNITED STATES OF AMERICA, Plaintiff, v.
ECOLAB INC., and PERMIAN MUD SERVICE, INC., Defendants.

Case 1:13-cv-00444. Filed 4/8/2013.

Proposed Final Judgment

    Whereas, Plaintiff, United States of America, filed its Complaint 
on April 8, 2013, the United States and Defendants, Defendant Ecolab 
Inc. (``Ecolab'') and Defendant Permian Mud Service, Inc. 
(``Permian''), by their respective attorneys, have consented to the 
entry of this Final Judgment without trial or adjudication of any issue 
of fact or law, and without this Final Judgment constituting any 
evidence against or admission by any party regarding any issue of fact 
or law;
    And whereas, Defendants agree to be bound by the provisions of this 
Final Judgment pending its approval by the Court;
    And whereas, the essence of this Final Judgment is the prompt and 
certain divestiture of certain rights or assets by Defendants to assure 
that competition is not substantially lessened;
    And whereas, the United States requires Defendants to make certain 
divestitures for the purpose of remedying the loss of competition 
alleged in the Complaint;
    And whereas, Defendants have represented to the United States that 
the divestitures required below can and will be made and that 
Defendants will later raise no claim of hardship or difficulty as 
grounds for asking the Court to modify any of the provisions contained 
below;
    Now therefore, before any testimony is taken, without trial or 
adjudication of any issue of fact or law, and upon consent of the 
parties, it is ordered, adjudged, and decreed:

I. Jurisdiction

    This Court has jurisdiction over the subject matter of and each of 
the parties to this action. The Complaint states a

[[Page 23301]]

claim upon which relief may be granted against Defendants under Section 
7 of the Clayton Act, as amended (15 U.S.C. 18).

II. Definitions

    As used in this Final Judgment:
    A. ``Acquirer'' means Clariant, the entity to which Defendants 
shall divest the Divestiture Assets.
    B. ``AKA'' means a Production Chemical that has an identical 
formulation or chemical makeup as a Champion Deepwater Production 
Chemical but has a different SKU or product name.
    C. ``Call-off Agreement'' means an agreement to provide production 
chemical management services for a particular asset, geographic region, 
or time period for a customer with whom the supplier has a Master 
Service Agreement in place.
    D. ``Broussard Facility'' means Champion's facility and other 
assets located at 304 Ida Rd., Broussard, Louisiana 70518.
    E. ``Champion'' means Champion Technologies, Inc., a Texas 
corporation with its headquarters in Houston, Texas, its successors, 
assigns, subsidiaries, divisions, groups, affiliates, partnerships, and 
joint ventures, and their directors, officers, managers, agents, and 
employees.
    F. ``Champion Deepwater Gulf PCMS Customer'' means any entity to 
which Champion provided PCMS in the Deepwater Gulf at any time between 
January 1, 2011 and the date the divestitures contemplated by this 
Final Judgment are completed.
    G. ``Champion Deepwater Gulf Production Chemical'' means any 
Production Chemical used to treat an oil or gas producing well in the 
Deepwater Gulf, including, but not limited to, HI43 and those chemicals 
listed in Schedule A, and all related tangible and intangible assets.
    H. ``Clariant'' means Clariant Corporation, the legal U.S. 
affiliate of Clariant International Ltd., headquartered in Charlotte, 
North Carolina, its successors, assigns, subsidiaries, divisions, 
groups, affiliates, partnerships, and joint ventures, and their 
directors, officers, managers, agents, and employees.
    I. ``Customer-Facing Relevant Employee'' means any employee who 
visits a Champion Deepwater Customer's Deepwater Gulf well or platform 
to provide PCMS, Relevant Employees who do not visit the Deepwater Gulf 
well or platform but directly supervise employees who do, or Relevant 
Employees who regularly interact with Champion Deepwater Gulf Customers 
but do not visit the customer's Deepwater Gulf wells or platforms on a 
regular basis.
    J. ``Deepwater Gulf'' means the areas of the United States Gulf of 
Mexico that have water depths exceeding 1,000 feet.
    K. ``Deepwater Gulf Well or Platform'' means a well, cluster of 
wells, or production facility associated with a well found in the 
Deepwater Gulf.
    L. ``Divestiture Assets'' means:
    (1) HI43 and all related Intellectual Property Rights;
    (2) Exclusive, perpetual, paid-up, non-transferable licenses for 
use in the Deepwater Gulf to all Intellectual Property Rights related 
to Champion's provision of Deepwater Gulf PCMS and Champion Deepwater 
Gulf Production Chemicals that Champion has provided to a Deepwater 
Gulf PCMS Customer since January 1, 2012 for use in the Deepwater Gulf 
and any AKAs of such products. Such licenses will not be subject to any 
requirement to grant back to the Defendants any improvements or 
modifications made to these assets;
    (3) All Intangible Assets, excluding Intellectual Property Rights, 
related to Champion's provision of Deepwater Gulf PCMS;
    (4) The option to acquire the Broussard Facility and all tangible 
and intangible assets used by or located at the Broussard Facility that 
are used to design, develop, manufacture, market, service, package, 
filter, blend, distribute, or test Deepwater Gulf Production Chemicals 
or provide PCMS to Champion Deepwater Gulf PCMS Customers;
    (5) The option to acquire the Deepwater Gulf Production Chemical 
Equipment listed in Schedule B, delivered to the Broussard Facility or 
to a U.S. location specified by the Acquirer; and
    (6) For each Champion Deepwater PCMS Customer who elects to 
transition its contract or business to the Acquirer, the option to 
acquire the tangible assets maintained by Champion for the purpose of 
providing PCMS at that Deepwater Gulf PCMS Customer's Deepwater Gulf 
Well(s) or Platform(s).
    M. ``Ecolab'' means Ecolab Inc., a Delaware corporation with its 
headquarters in St. Paul, MN, its successors and assigns, and its 
subsidiaries, divisions, groups, affiliates, partnerships, and joint 
ventures, and their directors, officers, managers, agents, and 
employees.
    N. ``Gulf'' means the United States Gulf of Mexico.
    O. ``HI43'' means Champion's low dose hydrate inhibitor Production 
Chemical claimed in U.S. Patent No. 7,381,689 and any reissue (and any 
foreign counterparts).
    P. ``Intangible Assets'' means:
    (1) know-how, including, but not limited to, recipes, formulas, 
machine settings, drawings, blueprints, designs, design protocols, 
standards, design tools, simulation capability, specifications, and 
application, manufacturing, blending, filtration, and testing 
techniques or processes;
    (2) confidential information or any information that provides an 
advantage with respect to competitors by virtue of not being known by 
those competitors, including strategic information, business plans, 
contract terms, pricing, processes and compilations of information, 
information concerning customers or vendors, including vendor and 
customer lists, sales materials, and information regarding methods of 
doing business.
    (3) data concerning historic and current research and development, 
including but not limited to, designs of experiments, and the results 
of unsuccessful designs and experiments;
    (4) computer software, databases (e.g. databases containing 
technical job histories) and related documentation;
    (5) contractual rights, to the extent they are assignable;
    (6) all authorizations, permits, licenses, registrations, or other 
forms of permission, consent, or authority issued, granted, or 
otherwise made available by or under the authority of any governmental 
authority; and
    (7) Intellectual Property Rights.
    Q. ``Intellectual Property Rights'' means information, designs, 
creations, inventions, and other intangible property for which 
exclusive rights are recognized, including but not limited to, patents 
or patent applications, licenses and sublicenses, copyrights, 
trademarks, trade secrets, trade names, service marks, and service 
names.
    R. ``The License-Back Period'' means the six (6) month period 
following Defendants' completion of the divestitures required by this 
Final Judgment, during which the Defendants are granted a license to 
use Champion Deepwater Gulf Production Chemicals with Intellectual 
Property Rights that have been transferred or licensed to the Acquirer.
    S. ``Permian'' means Permian Mud Service, Inc., a Texas corporation 
with its headquarters in Houston, Texas, its successors and assigns, 
and its subsidiaries (including Champion Technologies, Inc.), 
divisions, groups, affiliates, partnerships, and joint ventures, and 
their directors, officers, managers, agents, and employees.

[[Page 23302]]

    T. ``Production Chemicals'' means the blends of chemical 
intermediates and solvents that are introduced to the wellbore, topside 
equipment, umbilicals, flowlines or other well infrastructure of an oil 
or gas well to facilitate the production or flow of hydrocarbons from 
the wellbore to the topside equipment, protect the well's 
infrastructure and equipment, remove hazardous or undesirable elements 
from the hydrocarbons or produced water, and facilitate the separation 
of oil, gas, and water in the topside equipment.
    U. ``PCMS'' means the provision of production chemical management 
services, including but not limited to product selection or design, 
front-end engineering design assistance, manufacture or blending of 
production chemicals, application of chemicals, or monitoring and 
testing of well conditions and product efficacy.
    V. ``Relevant Employees'' means all Champion employees whose job 
responsibilities at any time between January 1, 2012 and the closing of 
the Transaction related to the provision of Deepwater Gulf PCMS.
    W. ``Transaction'' means Ecolab's acquisition of Permian described 
in the ``Agreement and Plan of Merger'' between Ecolab, Permian, OFC 
Technologies Corp., and John W. Johnson, Steven J. Lindley, and J. 
Loren Ross, solely in their capacity as the Representatives, dated 
October 11, 2012, as amended.
    X. ``Tangible Asset'' means any physical asset (excluding real 
property), including but not limited to:
    (1) all machinery, equipment, hardware, spare parts, tools, 
fixtures, business machines, computer hardware, other information 
technology assets, furniture, laboratories, supplies, and materials, 
including but not limited to testing equipment, injection equipment, 
monitoring equipment, and storage vessels;
    (2) improvements, fixed assets, and fixtures pertaining to the real 
property identified as a Divestiture Asset;
    (3) all inventories, raw materials, work-in-process, finished 
goods, supplies, stock, parts, packaging materials and other 
accessories related thereto; and
    (4) business records including financial records, accounting and 
credit records, tax records, governmental licenses and permits, bid 
records, customer lists, customer contracts, supplier contracts, 
service agreements; operations records including vessel logs, treatment 
logs, calendars, and schedules; job records, research and development 
records, health, environment and safety records, repair and performance 
records, training records, and all manuals and technical information 
Defendants provide to their own employees, customers, suppliers, agents 
or licensees.

III. Applicability

    This Final Judgment applies to Defendants Ecolab and Permian, as 
defined above, and all other persons in active concert or participation 
with any of them who receive actual notice of this Final Judgment by 
personal service or otherwise.

IV. Divestitures

    A. Defendants are ordered and directed, within ten (10) calendar 
days after the Court signs the Hold Separate Stipulation and Order in 
this matter, to divest the Divestiture Assets to the Acquirer in a 
manner consistent with this Final Judgment. Defendants shall use their 
best efforts to accomplish the divestitures ordered by this Final 
Judgment as expeditiously as possible. The United States, in its sole 
discretion, may extend the time period for any divestiture for an 
additional period of time not to exceed sixty (60) days.
    B. Defendants shall offer to furnish to the Acquirer, subject to 
customary confidentiality assurances, all information and documents 
relating to the Divestiture Assets customarily provided in a due 
diligence process except such information or documents subject to the 
attorney-client privileges or work-product doctrine. Defendants shall 
make available such information to the United States at the same time 
that such information is made available to the Acquirer. Any questions 
that arise during the due diligence process concerning whether 
particular assets are appropriately considered Divestiture Assets 
subject to this Final Judgment shall be resolved by the United States, 
in its sole discretion, consistent with the terms of this Final 
Judgment.
    C. Defendants shall permit the Acquirer of the Divestiture Assets 
to have reasonable access to personnel and to make inspections of the 
physical facilities of the Divestiture Assets; access to any and all 
environmental, zoning, and other permit documents and information; and 
access to any and all financial, operational, or other documents and 
information customarily provided as part of a due diligence process.
    D. Defendants shall warrant to the Acquirer that each asset will be 
operational on the date of sale. Defendants shall maintain and enforce 
all intellectual property rights licensed to the Acquirer and maintain 
and protect all trade secrets and confidential information furnished to 
the Acquirer pursuant to the proposed Final Judgment.
    E. Defendants shall not take any action that will impede in any way 
the permitting, operation, use, or divestiture of the Divestiture 
Assets.
    F. Defendants shall warrant to the Acquirer that there are no 
material defects in the environmental, zoning or other permits 
pertaining to the operation of each asset, and that following the sale 
of the Divestiture Assets, Defendants will not undertake, directly or 
indirectly, any challenges to the environmental, zoning, or other 
permits relating to the operation of the Divestiture Assets.
    G. At the option of the Acquirer, the Defendants shall enter into a 
supply agreement, toll manufacturing, or toll blending agreement with 
the Acquirer to manufacture, blend or supply, any Champion Deepwater 
Gulf Production Chemical or component(s) thereof for a period of up to 
one (1) year, which may be extended by the United States, in its sole 
discretion, for an additional period of time not to exceed one (1) 
year. The Defendants shall manufacture and blend the Champion Deepwater 
Gulf Production Chemicals or chemical intermediates using the 
manufacturing, blending and quality assurance procedures used by 
Champion directly preceding the Divestiture unless the Acquirer 
authorizes a change. The Defendants shall also procure the raw 
materials or intermediates used to make the Champion Deepwater Gulf 
Production Chemicals from the same source used by Champion directly 
preceding the Divestiture unless the Acquirer authorizes a change. For 
each year of the tolling agreement, the Defendants shall supply up to 
120% of the volume of Champion Deepwater Gulf Production Chemicals sold 
in the Deepwater Gulf in the prior year. The terms and conditions of 
such agreement shall be commercially reasonable and shall be subject to 
the approval of the United States, in its sole discretion.
    H. At the option of the Defendants, the Acquirer shall enter into 
an agreement to provide the Defendants with:
    (1) Non-exclusive, non-transferable fully paid-up licenses to 
provide any Champion Deepwater Production Chemical to Champion 
Deepwater Gulf PCMS Customers, for use in the Deepwater Gulf during the 
License-Back Period. Such licenses will be for the sole purpose of 
enabling the Defendants to continue providing those chemicals to a 
Champion Deepwater Gulf Customer during the License-Back Period. The 
United States, in its sole discretion, may

[[Page 23303]]

agree to an extension of the License-Back Period with respect to a 
particular customer for an additional period not to exceed six (6) 
months upon a showing of good cause, during which time the Defendants 
will retain the license to provide Champion Deepwater Production 
Chemicals to that particular Champion Deepwater Gulf PCMS Customer. The 
extension of this period with respect to a particular Champion 
Deepwater Gulf PCMS Customer does not alter the License-Back Period 
applicable to other Champion Deepwater Gulf PCMS Customers; and
    (2) A perpetual, non-exclusive, non-transferable, fully paid-up 
license to make, have made, use, or sell HI43 outside the Deepwater 
Gulf. The terms and conditions of any contractual arrangement intended 
to satisfy this provision must be reasonably related to market 
conditions for such licenses. Such license may, at the Acquirer's 
discretion, require the Defendants to grant back to the Acquirer any 
modifications or improvements made by the Defendants to HI43.
    I. The Defendants shall use their best efforts to assign, 
subcontract, or otherwise transfer to the Acquirer any (i) contract to 
provide PCMS in the Deepwater Gulf, or (ii) portion of a Master Service 
Agreement or global agreement, including Call-off Agreements, between 
Champion and a Champion Deepwater Gulf PCMS Customer relating to the 
provision of Champion Deepwater Gulf PCMS in the Deepwater Gulf. To 
this end, the Defendants shall notify each Champion Deepwater Gulf PCMS 
Customer of the terms of this Final Judgment; release the Champion 
Deepwater Gulf PCMS Customer of any notice requirements or obligations 
that require the customer to use Champion's services or refrain from 
using another supplier's services with respect to any Deepwater Gulf 
assets; introduce the Acquirer to each Customer, request each 
Customer's consent to assign that Customer's contract to the Acquirer; 
and specifically inform each such Customer that the Defendants' rights 
to the divested Champion Deepwater Gulf Production Chemicals, in 
Deepwater Gulf, expire after six (6) months. The Defendants shall not 
encourage any Champion Deepwater Gulf Customer to request an extension 
of the License-Back Period.
    J. At the option of the Acquirer, Defendants shall enter into a 
transition services agreement with that Acquirer sufficient to meet the 
Acquirer's needs for assistance in matters relating to the design, 
manufacture, formulation, testing, provision, or application of 
Production Chemicals and related services to any Champion Deepwater 
Gulf Customer for a period of up to three (3) months. The Acquirer may 
exercise this option during the License-Back Period and for three (3) 
months thereafter. The Defendant must make the personnel providing the 
transition services available during normal business hours. The terms 
and conditions of any contractual arrangement intended to satisfy this 
provision must be reasonably related to the market value of the 
expertise of the personnel providing any needed assistance.
    K. For a period of two (2) years following completion of the 
divestitures required by this Final Judgment, Defendants shall not, 
directly or indirectly, assign any Customer-Facing Relevant Employee to 
provide PCMS in the Deepwater Gulf to a Champion Deepwater Gulf PCMS 
Customer at a Deepwater Gulf Well or Platform for which the employee 
provided PCMS, directly or indirectly, while employed by Champion, 
except in connection with services provided to a Champion Deepwater 
Gulf PCMS Customer during the applicable License-Back Period for that 
customer.
    L. Unless the United States otherwise consents in writing, the 
divestiture pursuant to Section IV, or by trustee appointed pursuant to 
Section VI, of this Final Judgment, shall include the entire 
Divestiture Assets, and shall be accomplished in such a way as to 
satisfy the United States, in its sole discretion, that the Divestiture 
Assets can and will be used by the Acquirer as part of a viable, 
ongoing business engaged in the provision of PCMS for oil and gas wells 
located in the Deepwater Gulf, and that such divestiture will remedy 
the competitive harm alleged in the Complaint. The divestiture, whether 
pursuant to Section IV or Section VI of this Final Judgment,
    (1) shall be made to an acquirer that, in the United States' sole 
judgment, has the intent and capability (including the necessary 
managerial, operational, technical and financial capability) of 
competing effectively in the business of providing PCMS for oil and gas 
wells in the Deepwater Gulf; and
    (2) shall be accomplished so as to satisfy the United States, in 
its sole discretion, that none of the terms of any agreement between an 
acquirer and Defendants give Defendants the ability unreasonably to 
raise the acquirer's costs, to lower the acquirer's efficiency, or 
otherwise to interfere in the ability of the acquirer to compete 
effectively.

V. Right To Hire

    A. The Acquirer shall have the right to hire Relevant Employees 
while the License-Back Period is in effect with respect to any Champion 
Deepwater Gulf PCMS Customer. To enable the Acquirer to make offers of 
employment, Defendants shall provide the Acquirer and the United States 
with organization charts and information relating to Relevant 
Employees, including name, job title, past experience relating to 
development, production, sale or administration of Production Chemicals 
for use in oil or gas wells in the Deepwater Gulf, responsibilities, 
training and educational history, relevant certifications, and, to the 
extent permissible by law, job performance evaluations, and current 
salary and benefits information.
    B. Upon request, Defendants shall make the Relevant Employees 
available for interviews with the Acquirer during normal business hours 
at a mutually agreeable location and will not interfere with any 
negotiations by the Acquirer to employ the Relevant Employees. 
Interference with respect to this paragraph includes, but is not 
limited to, offering to increase the salary or benefits of Relevant 
Employees other than as a part of a company-wide increase in salary or 
benefits granted in the ordinary course of business.
    C. For Relevant Employees who elect employment by the Acquirer, 
Defendants shall waive all non-compete agreements and all nondisclosure 
agreements, except as specified below, vest all unvested pension and 
other equity rights, and provide all benefits to which the Relevant 
Employees would generally be provided if transferred to a buyer of an 
ongoing business. For a period of twelve (12) months after the 
Acquirer's right to hire expires, the Defendants shall not solicit to 
hire, or hire, any Relevant Employee hired by the Acquirer, unless (1) 
such individual is terminated or laid off by the Acquirer or (2) the 
Acquirer agrees in writing that Defendants may solicit or hire that 
individual.
    D. Nothing in this Section shall prohibit Defendants from 
maintaining any reasonable restrictions on the disclosure by an 
employee who accepts an offer of employment with the Acquirer of the 
Defendants' proprietary non-public information that is (1) not 
otherwise required to be disclosed by this Final Judgment and (2) 
unrelated to the Divestiture Assets.

VI. Appointment of Trustee

    A. If the Defendants have not divested the Divestiture Assets 
within the time

[[Page 23304]]

period specified in Section IV(A), Defendants shall notify the United 
States of that fact in writing. Upon application of the United States, 
the Court shall appoint a trustee selected by the United States and 
approved by the Court to effect the divestiture of the Divestiture 
Assets.
    B. After the appointment of a trustee becomes effective, only the 
trustee shall have the right to sell the Divestiture Assets. The 
trustee shall have the power and authority to accomplish the 
divestitures to acquirers acceptable to the United States at such price 
and on such terms as are then obtainable upon reasonable effort by the 
trustee, subject to the provisions of Sections IV, V, and VI of this 
Final Judgment, and shall have such other powers as this Court deems 
appropriate. Subject to Section VI(D) of this Final Judgment, the 
trustee may hire at the cost and expense of the Defendants any 
investment bankers, attorneys, or other agents, who shall be solely 
accountable to the trustee, reasonably necessary in the trustee's 
judgment to assist in the divestitures.
    C. Defendants shall not object to sales by the trustee on any 
ground other than the trustee's malfeasance. Any such objections by 
Defendants must be conveyed in writing to the United States and the 
trustee within ten calendar days after the trustee has provided the 
notice required under Section VII.
    D. The trustee shall serve at the cost and expense of Defendants, 
on such terms and conditions as the United States approves, and shall 
account for all monies derived from the sale of the assets sold by the 
trustee and all costs and expenses so incurred. After approval by the 
Court of the trustee's accounting, including fees for its services and 
those of any professionals and agents retained by the trustee, all 
remaining money shall be paid to Defendants and the trust shall then be 
terminated. The compensation of the trustee and any professionals and 
agents retained by the trustee shall be reasonable in light of the 
value of the Divestiture and based on a fee arrangement providing the 
trustee with an incentive based on the price and terms of the 
divestitures and the speed with which it is accomplished, but 
timeliness is paramount.
    E. Defendants shall use their best efforts to assist the trustee in 
accomplishing the required divestitures. The Defendants' failure to 
comply with Section IV(A) does not relieve the Defendants of their 
obligations to comply with the remainder of the terms in this Final 
Judgment. If a trustee is appointed, the acquirer procured by the 
trustee shall be deemed the Acquirer referenced in this Final Judgment. 
The trustee and any consultants, accountants, attorneys, and other 
persons retained by the trustee shall have full and complete access to 
the personnel, books, records, and facilities of the business to be 
divested, and Defendants shall develop financial and other information 
relevant to such business as the trustee may reasonably request, 
subject to reasonable protection for trade secret or other confidential 
research, development, or commercial information. Defendants shall take 
no action to interfere with or to impede the trustee's accomplishment 
of the divestitures.
    F. After its appointment, the trustee shall file monthly reports 
with the United States and the Court setting forth the trustee's 
efforts to accomplish the divestitures ordered under this Final 
Judgment. To the extent such reports contain information that the 
trustee deems confidential, such reports shall not be filed in the 
public docket of the Court. Such reports shall include the name, 
address, and telephone number of each person who, during the preceding 
month, made an offer to acquire, expressed an interest in acquiring, 
entered into negotiations to acquire, or was contacted or made an 
inquiry about acquiring, any interest in the Divestiture Assets, and 
shall describe in detail each contact with any such person. The trustee 
shall maintain full records of all efforts made to divest the 
Divestiture Assets.
    G. If the trustee has not accomplished the divestitures ordered 
under this Final Judgment within six (6) months after its appointment, 
the trustee shall promptly file with the Court a report setting forth: 
(i) The trustee's efforts to accomplish the required divestitures; (ii) 
the reasons, in the trustee's judgment, why the required divestitures 
have not been accomplished; and (iii) the trustee's recommendations. To 
the extent such reports contain information that the trustee deems 
confidential, such reports shall not be filed in the public docket of 
the Court. The trustee shall at the same time furnish such report to 
the United States, which shall have the right to make additional 
recommendations consistent with the purpose of the trust. The Court 
thereafter shall enter such orders as it shall deem appropriate to 
carry out the purpose of the Final Judgment, which may, if necessary, 
include extending the trust and the term of the trustee's appointment 
by a period requested by the United States.

VII. Notice of Proposed Divestitures

    A. Within two (2) business days following execution of a definitive 
contract for sale of any of the Divestiture Assets, Defendants or the 
trustee, whichever is then responsible for effecting the divestiture 
required herein, shall notify the United States of any proposed 
divestiture required by Sections IV or VI of this Final Judgment, and 
submit to the United States a copy of the proposed contract for sale 
and any other agreements with the Acquirer relating to the Divestiture 
Assets. If the trustee is responsible, it shall similarly notify 
Defendants. The notice shall set forth the details of the proposed 
divestiture and list the name, address, and telephone number of each 
person not previously identified who offered or expressed an interest 
in or desire to acquire any ownership interest in the Divestiture 
Assets, together with full details of the same.
    B. Within fifteen (15) calendar days of receipt by the United 
States of such notice, the United States may request from Defendants, 
the proposed Acquirer, any other third party, or the trustee, if 
applicable, additional information concerning the proposed divestiture, 
the proposed Acquirer, and any other potential Acquirers. Defendants 
and the trustee shall furnish any additional information requested 
within fifteen (15) calendar days of the receipt of the request, unless 
the parties shall otherwise agree.
    C. Within thirty (30) calendar days after receipt of the notice or 
within twenty (20) calendar days after the United States has been 
provided the additional information requested from Defendants, the 
proposed Acquirer, any third party, and the trustee, whichever is 
later, the United States shall provide written notice to Defendants and 
the trustee, if there is one, stating whether or not it objects to the 
proposed divestiture, provided, however, that the United States may 
extend the period for its review up to an additional thirty (30) 
calendar days. If the United States provides written notice that it 
does not object, the divestiture may be consummated, subject only to 
Defendants' limited right to object to the sale under Section VI(C) of 
this Final Judgment. Absent written notice that the United States does 
not object to the proposed Acquirer or upon objection by the United 
States, a divestiture proposed under Section IV or Section V shall not 
be consummated. Upon objection by Defendants under Section V(C), a 
divestiture proposed under Section V shall not be consummated unless 
approved by the Court.

[[Page 23305]]

VIII. Financing

    Defendants shall not finance all or any part of any purchase made 
pursuant to Section IV or VI of this Final Judgment.

IX. Hold Separate

    Until the divestitures required by this Final Judgment have been 
accomplished, Defendants shall take all steps necessary to comply with 
the Hold Separate Stipulation and Order entered by the Court. 
Defendants shall take no action that would jeopardize the divestiture 
ordered by the Court.

X. Affidavits

    A. Within fifteen (15) calendar days after the Court signs the Hold 
Separate Stipulation and Order in this matter, and every thirty (30) 
calendar days thereafter until the divestiture has been completed under 
Section IV or VI, Defendants shall deliver to the United States an 
affidavit as to the fact and manner of its compliance with Sections IV 
or VI of this Final Judgment. Each such affidavit shall include the 
name, address, and telephone number of each person who, during the 
preceding thirty (30) calendar days, made an offer to acquire, 
expressed an interest in acquiring, entered into negotiations to 
acquire, or was contacted or made an inquiry about acquiring, any 
interest in the Divestiture Assets, and shall describe in detail each 
contact with any such person during that period. Each such affidavit 
shall also include a description of the efforts Defendants have taken 
to solicit buyers for the Divestiture Assets and to provide required 
information to prospective Acquirers, including the limitations, if 
any, on such information. Assuming the information set forth in the 
affidavit is true and complete, any objection by the United States to 
information provided by Defendants, including limitation on 
information, shall be made within fourteen (14) calendar days of 
receipt of such affidavit.
    B. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, Defendants shall deliver to the United States an 
affidavit that describes in reasonable detail all actions Defendants 
have taken and all steps Defendants have implemented on an ongoing 
basis to comply with Section IX of this Final Judgment. Defendants 
shall deliver to the United States an affidavit describing any changes 
to the efforts and actions outlined in Defendants' earlier affidavits 
filed pursuant to this section within fifteen (15) calendar days after 
the change is implemented.
    C. Defendants shall keep all records of all efforts made to 
preserve and divest the Divestiture Assets until one year after such 
divestiture has been completed.

XI. Compliance Inspection

    A. For the purposes of determining or securing compliance with this 
Final Judgment, or of any related orders such as any Hold Separate 
Stipulation and Order, or of determining whether the Final Judgment 
should be modified or vacated, and subject to any legally recognized 
privilege, from time to time duly authorized representatives of the 
United States Department of Justice Antitrust Division, including 
consultants and other persons retained by the United States, shall, 
upon written request of an authorized representative of the Assistant 
Attorney General in charge of the Antitrust Division, and on reasonable 
notice to Defendants, be permitted:
    (1) Access during Defendants' office hours to inspect and copy, or 
at the option of the United States, to require Defendants to provide 
hard copy or electronic copies of, all books, ledgers, accounts, 
records, data, and documents in the possession, custody, or control of 
Defendants, relating to any matters contained in this Final Judgment; 
and
    (2) To interview, either informally or on the record, Defendants' 
officers, employees, or agents, who may have their individual counsel 
present, regarding such matters. The interviews shall be subject to the 
reasonable convenience of the interviewee and without restraint or 
interference by Defendants.
    B. Upon the written request of an authorized representative of the 
Assistant Attorney General in charge of the Antitrust Division, 
Defendants shall submit written reports or responses to written 
interrogatories, under oath if requested, relating to any of the 
matters contained in this Final Judgment as may be requested.
    C. No information or documents obtained by the means provided in 
this Section shall be divulged by the United States to any person other 
than an authorized representative of the executive branch of the United 
States, except in the course of legal proceedings to which the United 
States is a party (including grand jury proceedings), or for the 
purpose of securing compliance with this Final Judgment, or as 
otherwise required by law.
    D. If at the time information or documents are furnished by 
Defendants to the United States, Defendants represent and identify in 
writing the material in any such information or documents to which a 
claim of protection may be asserted under Rule 26(c)(1)(G) of the 
Federal Rules of Civil Procedure, and Defendants mark each pertinent 
page of such material, ``Subject to claim of protection under Rule 
26(c)(1)(G) of the Federal Rules of Civil Procedure,'' then the United 
States shall give Defendants ten (10) calendar days notice prior to 
divulging such material in any legal proceeding (other than a grand 
jury proceeding).

XII. No Reacquisition

    Defendants may not reacquire any of the Divestiture Assets during 
the term of this Final Judgment.

XIII. Retention of Jurisdiction

    This Court retains jurisdiction to enable any party to this Final 
Judgment to apply to the Court at any time for further orders and 
directions as may be necessary or appropriate to carry out or construe 
this Final Judgment, to modify any of its provisions, to enforce 
compliance, and to punish violations of its provisions.

XIV. Expiration of Final Judgment

    Unless the Court grants an extension, this Final Judgment shall 
expire ten (10) years from the date of its entry.

XV. Public Interest Determination

    The parties have complied with the requirements of the Antitrust 
Procedures and Penalties Act, 15 U.S.C. 16, including making copies 
available to the public of this Final Judgment, the Competitive Impact 
Statement, and any comments thereon and the United States' responses to 
comments. Based upon the record before the Court, which includes the 
Competitive Impact Statement and any comments and response to comments 
filed with the Court, entry of this Final Judgment is in the public 
interest.

Dated:-----------------------------------------------------------------

[Court approval subject to procedures of Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16]

[TO BE SIGNED AFTER SUCH PROCEDURES]
-----------------------------------------------------------------------
    United States District Judge

Schedule A

[[Page 23306]]



----------------------------------------------------------------------------------------------------------------
           Material description                                       Product category
----------------------------------------------------------------------------------------------------------------
Defoamer V-149............................  Anti-Foam Production Chemicals.
Defoamer V-151............................  Anti-Foam Production Chemicals.
Defoamer V-159............................  Anti-Foam Production Chemicals.
Flotron M-239DW...........................  Asphaltene Production Chemicals.
Flotron M-267DW...........................  Asphaltene Production Chemicals.
Flotron PA-1000...........................  Asphaltene Production Chemicals.
Flotron M-239.............................  Asphaltene Production Chemicals.
Bactron K-103.............................  Biocides Production Chemicals.
Bactron K-95..............................  Biocides Production Chemicals.
Surfatron DQ-91...........................  Biocides Production Chemicals.
RPA-102...................................  Boiler Water Process Additives.
Capclean H-101DW..........................  Capillary Cleaning Production Chemicals.
Capclean H-102DW..........................  Capillary Cleaning Production Chemicals.
Capclean W-202DW..........................  Capillary Cleaning Production Chemicals.
Acetic Acid, Glacial......................  Commodity Production Chemicals.
BC-215....................................  Commodity Production Chemicals.
Toluene...................................  Commodity Production Chemicals.
Xylene....................................  Commodity Production Chemicals.
XyleneDW..................................  Commodity Production Chemicals.
Cortron HRU-100...........................  Corrosion Production Chemicals.
Cortron R-228.............................  Corrosion Production Chemicals.
Cortron R-856.............................  Corrosion Production Chemicals.
Cortron RN-177............................  Corrosion Production Chemicals.
Cortron RN-261............................  Corrosion Production Chemicals.
Cortron RN-384............................  Corrosion Production Chemicals.
Cortron RN-406............................  Corrosion Production Chemicals.
Cortron RN-466............................  Corrosion Production Chemicals.
Cortron RN-488............................  Corrosion Production Chemicals.
Cortron RU-142............................  Corrosion Production Chemicals.
Cortron RN-261FB..........................  Corrosion Production Chemicals.
Cortron RN-466FB..........................  Corrosion Production Chemicals.
Cortron RN-488DW..........................  Corrosion Production Chemicals.
Cortron RN-488FB..........................  Corrosion Production Chemicals.
Emulsotron X-1021.........................  Demulsifiers Production Chemicals.
Emulsotron X-1164.........................  Demulsifiers Production Chemicals.
Emulsotron X-1329.........................  Demulsifiers Production Chemicals.
Emulsotron X-1523.........................  Demulsifiers Production Chemicals.
Emulsotron X-1523DW.......................  Demulsifiers Production Chemicals.
Emulsotron X-1665.........................  Demulsifiers Production Chemicals.
Emulsotron X-1678.........................  Demulsifiers Production Chemicals.
Emulsotron X-1808.........................  Demulsifiers Production Chemicals.
Emulsotron X-203..........................  Demulsifiers Production Chemicals.
Emulsotron X-316..........................  Demulsifiers Production Chemicals.
Emulsotron X-421..........................  Demulsifiers Production Chemicals.
Emulsotron X436B5.........................  Demulsifiers Production Chemicals.
Emulsotron X-917..........................  Demulsifiers Production Chemicals.
Emulsotron X-606..........................  Demulsifiers Production Chemicals.
Emulsotron X-715..........................  Demulsifiers Production Chemicals.
Emulsotron X-716..........................  Demulsifiers Production Chemicals.
Emulsotron X-8292.........................  Demulsifiers Production Chemicals.
Emulsotron X-942..........................  Demulsifiers Production Chemicals.
FlowPlus DR-2000C.........................  Flow Improvers Production Chemicals.
Surfatron DQ-76...........................  General Surfactants Production Chemicals.
Surfatron DQ-86...........................  General Surfactants Production Chemicals.
Assure HI-43DW............................  Hydrate Production Chemicals.
Assure HI-57DW............................  Hydrate Production Chemicals.
Assure HI-81..............................  Hydrate Production Chemicals.
Flexoil FM-230DW..........................  Paraffin Production Chemicals.
Flexoil FM-102DW..........................  Paraffin Production Chemicals.
Flexoil FM-192DW..........................  Paraffin Production Chemicals.
Flotron M-261DW...........................  Paraffin Production Chemicals.
Flotron M-55..............................  Paraffin Production Chemicals.
Gyptron EGP-5015..........................  Scale Production Chemicals.
Gyptron SA1110N...........................  Scale Production Chemicals.
Gyptron T-182.............................  Scale Production Chemicals.
Gyptron T-255.............................  Scale Production Chemicals.
Gyptron T-494.............................  Scale Production Chemicals.
Gyptron T-94..............................  Scale Production Chemicals.
Gyptron TA-13.............................  Scale Production Chemicals.
Hydrochloric Acid, HCL, 15%...............  Scale Production Chemicals.
Hydrochloric Acid, HCL, 5%................  Scale Production Chemicals.
Gyptron TA-21.............................  Scale Production Chemicals.
Hydrochloric Acid.........................  Scale Production Chemicals.
Gas Treat 164.............................  Scavengers Production Chemicals.

[[Page 23307]]

 
Gas Treat 164FB...........................  Scavengers Production Chemicals.
Gas Treat 164FBC..........................  Scavengers Production Chemicals.
Cleartron HZB-48..........................  Water Clarifier Production Chemicals.
Cleartron HZB-49..........................  Water Clarifier Production Chemicals.
Cleartron PZ-20000........................  Water Clarifier Production Chemicals.
Cleartron ZB-103..........................  Water Clarifier Production Chemicals.
Cleartron ZB-165..........................  Water Clarifier Production Chemicals.
Cleartron ZB-167..........................  Water Clarifier Production Chemicals.
Cleartron ZB-258..........................  Water Clarifier Production Chemicals.
Cleartron ZB-279..........................  Water Clarifier Production Chemicals.
Cleartron ZB-307..........................  Water Clarifier Production Chemicals.
Cleartron ZB-374..........................  Water Clarifier Production Chemicals.
Cleartron ZB-45...........................  Water Clarifier Production Chemicals.
Cleartron ZB-543..........................  Water Clarifier Production Chemicals.
Cleartron PZ-15000FB......................  Water Clarifier Production Chemicals.
Cleartron ZB-582..........................  Water Clarifier Production Chemicals.
Cleartron ZB-83...........................  Water Clarifier Production Chemicals.
----------------------------------------------------------------------------------------------------------------

Schedule B

------------------------------------------------------------------------
             Equipment name                      General purpose
------------------------------------------------------------------------
Densitometer...........................  Product density.
FTIR...................................  General product fingerprinting.
Brookfield viscometer..................  Product viscosity.
NVR analyzer...........................  Product activity measurement.
Particle size analyzer.................  Particle size for deepwater
                                          products.
Shaker for particle testing............  Homogenizing.
pH meter...............................  pH measurement.
Hot bath, cold bath....................  General purpose.
Refrigerator...........................  General purpose.
KF titrator............................  Water content analyzer.
Centrifuge.............................  General purpose.
UV-Vis.................................  General purpose for water
                                          analysis.
DSC....................................  Was appearance temperature for
                                          an oil.
HTGC...................................  Was content and wax
                                          distribution of an oil.
ICP....................................  Water analysis, cations.
IC.....................................  Water analysis, anions.
AA.....................................  Water analysis (obsolete with
                                          ICP).
Balance................................  Various top loader and analysis
                                          balances.
Cold finger............................  Wax inhibitor screening.
Turbiscan..............................  Asphaltene inhibitor screening.
Hot bath, cold bath, hot plate.........  Pour point testing, scale
                                          bottle testing, phase sep
                                          bottle testing, compatibility.
Bottle shaker..........................  For shaking bottles.
Incubator..............................  For bacteria bug bottles.
ATP meter..............................  Bacteria rapid screen test.
IR Meter...............................  Oil in water measurements.
Top stirred autoclave for AAHI testing   Low pressure hydrate autoclave.
 (5000 psi).
High pressure long term static           Long term high pressure
 stability test.                          stability testing, built for
                                          one customer.
Refrigerated centrifuge................  Accelerates the product aging
                                          process by adding centrifugal
                                          force.
Iotrascan..............................  Saturate, aromatic, resins, and
                                          asphaltene analysis.
Hydrate Rocking Cell (5000 psi)........  Standard hydrate rocking cell.
Defoamer test at pressurized conditions  Oil can be mixed with gas and
                                          depressurized
                                          to ambient conditions.
------------------------------------------------------------------------

[FR Doc. 2013-09055 Filed 4-17-13; 8:45 am]
BILLING CODE P