Controversial Oilman Linked to Anschutz Sale of Pipeline Stake

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Denver billionaire Philip Anschutz has agreed to sell his share of a publicly held limited partnership, Pacific Energy Partners L.P., to a partnership with ties to controversial oilman Oscar S. Wyatt Jr.


Wyatt, the founder of oil company Coastal Corp., figured prominently in a Central Intelligence Agency report released last month on the United Nations-supervised Oil for Food program in place in Iraq.


Wyatt has denied allegations that he paid secret surcharges to Saddam Hussein, but told The New York Times that company executives were aware a broker was required to pay the surcharges. Saddam took in an estimated $11 billion in improper profits through the program, according to the CIA report. The report estimated Wyatt and the companies he was linked to made $23 million


El Paso Corp., which acquired Coastal in 2001, has acknowledged receiving a federal grand jury subpoena on the matter, and the House International Relations Committee is also investigating the Oil for Food program.


Last week, Long Beach-based Pacific Energy Partners issued a release saying Anschutz Corp. would sell its 36.7 percent interest to a newly formed partnership that has been working with Wyatt.


The partnership, created by investment banker Lehman Brothers Merchant Banking Group, may offer Wyatt “the opportunity to acquire a small equity interest,” the press release said, adding that “Mr. Wyatt may become an employee or director” of the new entity or the general partner.


Pacific Energy added, though, that “such involvement is not the subject of any current agreement” between Lehman Brothers and Wyatt.


Nonetheless, two employees of a company Wyatt owns, Forrest E. Wylie and Khalid A. Muslih, are resigning to become officers and investors of the newly created partnership, LB Pacific LP.

Anschutz officials did not return calls.


Pacific Energy was formed in 2002 for the purpose of spinning off Anschutz’s own oil pipeline assets in California and Colorado. It came public that year at $19.50 a unit and was trading above $28 a unit last week.


Anschutz has sold off a 20 percent stake in the past year. The share he is now selling is worth just under $300 million at current prices.


Both Anschutz and Clifford P Hickey, managing director of Anschutz Investment Co., will resign as directors of Pacific Energy when the deal is completed in early 2005.

Kate Berry

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