Oil merger talks rumored

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Tuesday, Sept. 21, 1999 | 11:04 a.m.

THE ASSOCIATED PRES

BARTLESVILLE, Okla. -- Phillips Petroleum Co. shares rose as much as 6.5 percent Monday amid expectations that talks with Chevron Corp. may result in Phillips selling assets to or combining businesses with its larger rival.

Phillips is discussing a chemical alliance and a sale of a $1.1 billion natural-gas processing unit with Chevron, a person familiar with the talks told Bloomberg News. Both companies declined to comment. The Sunday Times of London reported Sunday, without citing sources, that Chevron is in talks to buy Phillips.

The Chevron talks show Bartlesville, Okla.-based Phillips and its new Chief Executive James Mulva are moving more aggressively to compete with expanding rivals, analysts say.

Last year, Phillips spent $12.50 for each barrel of oil found and produced, more than double the $4.91 average for other major oil companies, according to PaineWebber Inc.