ATC Atlantic Coal

RNS Number:4087A
BP Amoco PLC
5 November 1999

                                       
BP AMOCO AGREES SETTLEMENT WITH STATE OF ALASKA

BP  Amoco  and ARCO today announced they have reached provisional agreement 
with  the  Alaskan  State Governor on a package of asset disposals and  other 
measures designed to secure Alaskan government acceptance for the proposed
combination of the two companies.

Subject  to the completion of the combination, BP Amoco will sell 175,000
barrels of  production per day together with associated infrastructure, 620,000
acres of state  and  federal exploration leases, and matching stakes in  the 
Trans-Alaska pipeline system (TAPS).

BP  Amoco chief executive Sir John Browne said: "Today's agreement with Alaska
is a critical step in our progress towards completing the ARCO deal.

"After  several  months of complex negotiations we have agreed terms  which 
will allow  BP  Amoco  to retain nearly three-quarters of the value of ARCO's 
Alaskan assets.  At the same time, we have met the exacting requirements of the
state of Alaska in a deal we believe will be acceptable to Alaska as a whole."

Browne  said  the  disposals  would have minimal impact  on  the  $1  billion 
of synergies targeted worldwide from the combination of BP Amoco and ARCO.

"Most  importantly,  this agreement preserves our interests in  the  Prudhoe 
Bay field,  including the single-operatorship. With the efficiencies we will 
achieve from  that and the other assets we retain, we can still deliver over
$140 million of  the  $200  million  synergies we targeted from the  Alaskan 
element  of  the combination. We also expect the value of the synergies we
forego to be reflected in the price we get for the assets we sell," he said.

Browne  said more than half a dozen major companies had already expressed 
strong interest  in  the properties on offer and data-rooms would shortly be 
opened to  enable would-be buyers to prepare for bidding.

Today's  deal means BP Amoco will keep just over half of the production
currently coming from ARCO in Alaska, increasing BP Amoco's Alaskan output by
about 175,000 barrels a day -- and will retain over a million acres of
exploration land  on the North  Slope,  including  430,000  acres in the
newly-opened  National Petroleum Reserve area.

While  Alaskan  Governor Tony Knowles conducts a two-week public consultation 
on the  agreement,  the company said it would continue to work with the  US 
Federal Trade  Commission  (FTC)  and the West Coast States  of  California, 
Oregon  and Washington to secure overall regulatory approvals for the ARCO
combination.

"This  agreement makes Alaska a stronger and more competitive player in the
world oil  market,"  Governor Knowles said. "It achieves the important  goals 
Alaskans agree   on  when  it  comes  to  development  of  Alaska's  resources: 
increased competition, environmental protection and corporate commitment."

Under the terms of today's agreement with Alaska, BP Amoco proposes to divest
the operatorships of the Kuparuk and Alpine fields and 175,000 barrels of 
production per day, primarily from the Kuparuk field.

It  will also dispose of a 13 per cent stake in TAPS, corresponding to the 
level of  production on offer, and will undertake to sell further stakes to
future new producers.

As part of the agreement BP Amoco will make up to 1.2 billion standard cubic
feet of  North Slope natural gas a day available to commercial projects at
competitive netback prices.

The   company  has  additionally  agreed  to  a  range  of  other  Alaskan 
State requirements, including:

Sale or transfer of Jones Act ships to buyers of  production

Purchase of oil from small producers at a pre-arranged price formula

Making  available  certain of its proprietary exploration  data  and 
encouraging partners to do likewise

Committing to take an industry lead and spend up to $10 million cleaning up
North Slope sites created by and abandoned by other companies

Reviewing  its  corrosion-monitoring programme for in-field  flowlines  at 
least twice a year with State environmental agencies

Allowing  continued access by other companies to its North Slope  spill 
response facilities

Hiring  qualified  Alaskans  when  they  are  available,  encouraging  BP  
Amoco contractors and service providers to train and hire qualified Alaskans,
and using Alaska-based companies to fabricate production facilities in Alaska
when feasible 

Donating the equivalent of 0.2 per cent of production a year to Alaska,
currently estimated at approximately $6 million a year, of which 30 per cent
will go to the Alaska university system.

In  a concluding statement on today's agreement, Sir John Browne said: "This
deal is  a  crucial  milestone  in  the approval process and  I  believe  a 
similarly constructive and timely outcome is within reach on the concerns of 
the  FTC and the  other  states,  allowing  us to complete the ARCO  transaction
 as  soon as possible."


END


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