UNITED STATES OF AMERICA
                                   BEFORE FEDERAL TRADE COMMISSION





 In the Matter of



           Phillips Petroleum Company,

                      a corporation,                              Docket No. C-4058

                                  and

         Conoco Inc.,

                    a corporation.




                                                  COMPLAINT

          Pursuant to the provisions of the Federal Trade Commission Act and the Clayton Act, and by
virtue of the authority vested in it by said Acts, the Federal Trade Commission ("Commission"),
reason to believe that respondent Phillips Petroleum Company has entered into an agreement to merge
with Conoco Inc., all subject to the jurisdiction of the Commission, in violation of Section 5 of
Federal Trade Commission Act, as amended, 15 U.S.C. § 45, that such merger, if consummated,
would violate Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal
Trade Commission Act, as amended, 15 U.S.C. § 45, and that a proceeding in respect thereof would
be in the public interest, hereby issues this complaint, stating its charges as follows.

                                              I.     RESPONDENTS

                                             Phillips Petroleum Company

1.        Respondent Phillips Petroleum Company ("Phillips") is a corporation organized, existing,
          doing business under and by virtue of the laws of the State of Delaware, with its office
          principal place of business at Phillips Building, Bartlesville, Oklahoma 74004.

2.        Respondent Phillips is, and at all times relevant herein has been, engaged in, among
          the bulk supply, terminaling and marketing of light petroleum products, the bulk supply of
          propane, the gathering of natural gas and the fractionation of raw mix in the United


3.    Respondent Phillips had total revenues of  $47.7 billion in 2001.

          Analysis of Proposed Consent Order to Aid Public Comment

                              I. Introduction

   The Federal Trade Commission ("Commission" or "FTC") has issued a
   complaint ("Complaint") alleging that the proposed merger of Phillips
   Petroleum Company ("Phillips") and Conoco Inc. ("Conoco")
   (collectively "Respondents") would violate Section 7 of the Clayton
   Act, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission
   Act, 15 U.S.C. § 45. The Commission and Respondents have entered into
   an agreement containing consent orders ("Agreement Containing Consent
   Orders") pursuant to which Respondents agree to be bound by a proposed
   consent order that requires divestiture of certain assets and certain
   other relief ("Proposed Order") and a hold separate order that
   requires Respondents to hold separate and maintain certain assets
   pending divestiture ("Hold Separate Order"). The Proposed Order
   remedies the likely anti-competitive effects arising from Respondents'
   proposed merger, as alleged in the Complaint. The Order to Hold
   Separate and Maintain Assets preserves competition pending
   divestiture.

             II. Description of the Parties and the Transaction

   Phillips, headquartered in Bartlesville, Oklahoma, is an integrated
   oil company engaged in the worldwide exploration, production, and
   transportation of crude oil and natural gas; gathering of natural gas;
   fractionation of raw mix into specification products; refining,
   marketing, and transportation of petroleum products; and production
   and marketing of chemicals. Phillips is the nation's third largest
   refiner and fourth largest gasoline marketer, with approximately 10
   percent of the United States refining capacity and 9 percent of
   gasoline marketing. In 2001, Phillips had revenues of $47.7 billion.
   Phillips has significant terminal facilities that it uses to
   distribute gasoline and other petroleum products to its customers.
   Phillips owns or licenses several gasoline brands under which gasoline
   is sold at approximately 11,700 stations throughout the United States.
   Phillips owns approximately 1,700 outlets in the Mid-Atlantic and
   Northeastern areas of the United States. These outlets currently sell
   gasoline under the Exxon and Mobil brands. Of the approximate 10,000
   other outlets, primarily located outside the Mid-Atlantic and
   Northeastern United States, the great majority are owned and operated
   by independent marketers and dealers. Phillips also owns slightly more
   than 30 percent of Duke Energy Field Services, LLC ("DEFS"). DEFS is a
   significant gatherer of natural gas throughout the United States and
   has interests in many fractionation facilities throughout the United
   States.

   Conoco, headquartered in Houston, Texas, is a fully integrated