FOR IMMEDIATE RELEASE                                          AT
MONDAY, MAY 13, 1996                               (202) 616-2771
                                               TDD (202) 514-1888

   JUSTICE DEPARTMENT ALLOWS TEXAS OIL-DRILLING FIRMS' PROPOSAL
     TO FORM JOINT-PURCHASING AGENT TO PROCURE CHINESE BARITE

     WASHINGTON, D.C. -- The Department of Justice today said
that it would not challenge a proposal by three Texas oil 
well-drilling suppliers--Baker Hughes Inteq and M-1 Drilling
Fluids of Houston and Dresser Industries Inc. of Dallas--to
jointly buy Chinese produced barite, a chemical used in the oil-
drilling process.  
     The Department's Antitrust Division said that since the
Chinese Barite purchased by the three firms accounts for less
than 35 percent of world barite production and the shipping
capacity in any China-U.S. trade, the proposed joint venture
would not likely have an anticompetitive effect in those markets.
     Anne K. Bingaman, Assistant Attorney General in charge of
the Department's Antitrust Division said that the joint
purchasing would not "raise a significant risk of collusion in
the sale of the finished product" since the jointly-purchased
Chinese barite makes up a small portion of the cost of the
finished product sold by the three firms--drilling fluids and
other oil well services.  The risk was further reduced by
procedures that the joint venture will employ to limit
communications between its employees and those of the three
owners, the Department said.
     The Department also observed that to the extent that the
joint-purchasing proposal reduced the costs of assuring the
quality and reliability of Chinese barite, the proposal would be
procompetitive.
     The Department's position was stated in a business review
letter from Anne K. Bingaman, Assistant Attorney General in
charge of the Antitrust Division, to counsel representing the
three firms.  
     According to the applicants, recent supplies of Chinese
barite have failed to meet the quality requirements of U.S.
purchasers.  As a result, U.S. producers have had to undertake
expensive actions to counteract the reduced quality of the
Chinese barite.  U.S. purchasers also have encountered shipping
reliability problems with respect to Chinese barite because
promised shipments have been diverted at the last minute.
     To remedy supply problems, the proposal will establish a
joint venture corporation that will purchase barite from Chinese
suppliers on behalf of the three firms, provide for quality
testing before shipment from China, try to improve the quality
control methods of suppliers of the Chinese barite and/or arrange
for shipment from China to the facilities of the three firms.  
     The joint venture entity will resell the Chinese barite to
its owners at cost.  The three firms would be required to
purchase Chinese barite exclusively through their joint venture
purchasing agent.  They would continue, however, to independently
purchase non-Chinese barite. 
     Negotiations on behalf of the joint venture will be
conducted by that venture's employees or an independent party
hired by the joint venture rather than by employees of the owner
firms.  Communications between the joint venture negotiators and
an owner firm will be kept confidential.  For example, it will
not be shared with other owner firms.  All meetings of the joint
venture's board of directors will be monitored by counsel, and
discussions will be limited to publicly-available information
related to Chinese barite.
     Barite is a soft, dense, chemically inert material that is
used as a weighing agent in oil well-drilling fluids to
counteract certain pressures that result from well drilling and
operation.  
     China is the world's largest barite producer, accounting for
about a third of total production.  About 42 percent of barite
consumed in the U.S. consumption comes from China.
     Under the Department's Business Review Procedure, an
organization may submit a proposed action to the Antitrust
Division and receive a statement as to whether the Division will
challenge the action under the antitrust laws.
     A file containing the business review request and the
Department's response may be examined in the Legal Procedure Unit
of the Antitrust Division, Suite 215, Liberty Place, 325 7th
Street, N.W., Department of Justice, Washington, D.C.  20004. 
After a 30-day waiting period, the documents supporting the
business review will be added to the file.
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