Atlantic Richfield - Contract Signed

RNS No 5882r
ATLANTIC RICHFIELD COMPANY
29th June 1998

          Production Sharing Contracts Signed By ARCO for Coallbed
                         Methane Project in China

BEIJING, June 29 /PRNewswire/ -- ARCO (NYSE: ARC) and China United Coalbed
Methane Corp. today signed production-sharing contracts under which ARCO will
evaluate the commercial potential of three coalbed methane prospects in Shanxi
Province in the People's Republic of China.

ARCO China Inc.  and ARCO Ordos CMB Limited, wholly-owned subsidiaries of
Los Angeles-based ARCO, plan to initiate a piloting and appraisal program this
summer.  Development would proceed if the piloting efforts are successful, with
start-up possible by 2003.  Gross development costs of the Phase I piloting and
appraisal program are expected to total $52 million.  ARCO currently owns a 49%
interest in the prospects.

"We know that the area is rich in coal seam gas, "said James Weeks, President of
ARCO China Inc.  "We must now determine whether the volumes and rates of
recovery are sufficient to make this project commercial over the long-term.  We
must also find a market for the gas, so concurrent with the drilling program we
will pursue various marketing options, including power generation, compressed
natural gas vehicle fuels, industrial fuel, and town gas."

The three concessions, known as Sanjiao, Sanjiao Bei, and Shilou, cover about
5,000 square kilometers (1,930 square miles) in the Hedong Coal Basin about 370
miles southwest of Beijing.

"The Hedong basin fields are excellently positioned to support China's
industrial growth and provide the kind of cleaner-burning fuel that will improve
the quality of life for millions of people in the region," said ARCO Chairman
and Chief Executive Officer Mike R. Bowlin, who was in Beijing for the signing
ceremony.

"ARCO has been involved with China for almost 20 years and we hope to play an
increasingly important role as a provider of environmentally-preferred fuels for
years to come."

Bowlin noted that ARCO has been in the coalbed methane business for more than a
decade, operating the most efficient coalbed methane project in the San Juan
Basin/Four Corners area of the United States.  "We intend to build upon our
creative technology in China," he added.

China United Coalbed Methane Corp. was established in 1996 by the Ministry of
Coal Industry, the Ministry of Geology and Mineral Resources, and the China
National Petroleum Corp. to supervise and administer the development of coalbed
methane industry in China.

NOTE TO EDITORS: For a menu of ARCO's news releases or to retrieve a specific
release, visit our website at http://www.arco.com on the Internet.

CONTACT: Tom Goff of ARCO 213-486-2456
Web site: http://www.arco.com

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