Federal trade regulators in the United States have ordered Canadian-owned Irving Oil to divest itself of some of its holdings in Maine in order to promote competition.
The Federal Trade Commission wants Irving Oil Terminals Inc. and Irving Oil Ltd. to relinquish the rights to terminal and pipeline assets acquired from Exxon Mobil in the southern part of the state.
The commission said the objective is to maintain competition in gasoline and distillates in the South Portland and Bangor-Penobscot Bay areas.
“We expect the relief obtained here to accomplish that goal and protect consumers from higher gas prices,” said Richard Feinstein, the commission's Bureau of Competition director, in a statement issued Thursday.
“We continue to closely monitor deals in the energy sector to ensure that consumers of petroleum products are served by competitive markets.”
The commission said terminals are critical to the sale and distribution of fuel and the transaction would have substantially increased ownership concentration.
Irving Oil said it had entered into purchase and sale agreements for the Exxon Mobil assets on the condition it obtained all regulatory approvals.
In a statement released Friday, the company said it voluntarily changed the structure of the deal by partnering with Buckeye Partners, an energy supply firm, to address competition concerns raised by Maine's attorney-general.
“This transaction not only represents another chapter in our long history of successful partnerships in the distribution and marketing of energy products, but also exemplifies our long-term commitment to the economy and long-term energy security of the State of Maine,” said Gary Bischof, general manager of Irving Oil Commercial.
The commission order requires Irving to give up its acquisition rights to Exxon Mobil's Bangor terminal and intrastate pipeline as well as 50 per cent of Exxon Mobil's South Portland terminal to Buckeye.
Under the proposed partnership with Buckeye, Irving would have long-term, independent marketing rights at the terminal and use of the pipeline, which would be owned and operated by Buckeye.
The order says Irving must also notify the commission before it acquires any additional ownership interests in any petroleum products, transportation or storage facilities in Maine.
A final order will not be written until after a mandatory 30-day public comment period.
Irving Oil said it is hoping to close the deal by July, contingent on the commission's final approval.
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