The U.S. Justice Department has approved a proposal by six oil companies and Texas A&M University to form a joint venture to conduct oil exploration and production research.
Charter members of the Petroleum E&P Cooperative are Amoco Corp., ARCO, Exxon Corp., Mobil Corp., Texaco Inc., and Shell Oil Co.
Other exploration and production firms can join, but not oil service firms.
Justice's Antitrust Division said the venture did not appear to be designed to restrict competition among its members.
Joel Klein, acting assistant attorney general, said, "To the extent that the cooperative in fact engages in research efforts that would not be undertaken by individual firms, the joint venture may have the pro-competitive effect of promoting innovation."
Texas A&M will develop the cooperative's annual research plan, coordinate work, and supply staff support. It will inform Justice of the cooperative's specific research projects and any changes in its membership.
The venture is expected to have an initial budget of less than $5 million/year. Justice said the oil firms will continue to perform independent research that will exceed the scope of the joint venture.
Justice said the applicants' proposal reported 61 entities were pursuing E&P research last year with total budgets in excess of $1 billion.
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