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Group of Unocal 76 Station Operators Suing to Block Sale

Courts: They allege deal is part of conspiracy to control U.S. oil industry. Unocal rejects claim. Hearing set for Tuesday.


COSTA MESA — A group of Unocal 76 service station owners, alleging a conspiracy to control the availability and price of oil and gasoline products, filed a federal antitrust suit Wednesday seeking to block the sale of Unocal Corp.'s retailing and refinery arm in Orange County.

Unocal agreed last year to sell its 76 Products Co. subsidiary in Costa Mesa to independent refinery operator Tosco Corp. for nearly $2 billion. The sale is expected to close March 31.

In their suit, 30 Unocal service station owners from throughout California allege that sale of the 76 Products unit, which includes all of Unocal's service stations, refineries, pipelines, trucking fleets and ocean-going tankers, is the latest episode in a long-standing conspiracy by oil producers intent on "controlling the oil industry in the United States."

A Unocal spokesman said there is "absolutely no conspiracy."

The station owners are seeking an order halting the transaction until a trial is held on the lawsuit. A hearing is scheduled Tuesday in U.S. District Court in Los Angeles.

The suit says service station operators were notified in December that their property leases and contracts to purchase fuel from El Segundo-based Unocal would be terminated early because of the Tosco deal.

The station owners, the suit says, believe Unocal should have offered them the opportunity to buy their stations. Instead, they now will have to renegotiate their leases and supply contracts with Tosco.

Tosco's purchase of 76 Products Co. will make the Connecticut-based company one of the largest oil refiners and marketers in the United States and could "substantially lessen competition and tend to create a monopoly in refining and marketing in California," the suit says.

Officials at Tosco could not be reached for comment.

The company faces other troubles in its purchase of 76 Products. The union representing 900 workers at the three Unocal refineries Tosco is acquiring has said it will launch a strike on Sunday. The labor unrest at the refineries in Northern California and El Segundo erupted after Tosco said it would lay off almost 200 of the workers without regard to seniority once it assumed ownership.

Tosco is known as a tight-fisted operator that increases profits by slashing operating costs at its refineries.

The company also has said it will move 76 Products' headquarters to Phoenix from Costa Mesa when the sale is completed and that as many as 300 corporate workers will lose their jobs because of the relocation and consolidation.

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