Atlantic Richfield - Drilling Report

RNS No 7944p
ATLANTIC RICHFIELD COMPANY
18th August 1998


ARCO, BG plc Announce Reserves Additions For Tangguh Lng Project In Indonesia;
Proved Reserves Climb 128% To 14.4 Tcf; Probable Reserves Add Another 3.9 Tcf

LOS ANGELES, Aug. 18 /PRNewswire/ -- ARCO (NYSE: ARC) and BG plc announced
today that Tangguh project proved reserves, critical to the formation of a
liquefied natural gas (LNG) project and the focus of an intensive drilling
program in eastern Indonesia over the past 12 months, increased dramatically
from the 6.3 trillion cubic feet (TCF) announced last year to 14.4 TCF as of
July 31, 1998.

Reserves were estimated by the independent petroleum engineering firm,
DeGolyer and MacNaughton (D&M).

D&M also estimates that proved and probable gas reserves increased from
last year's 13.3 TCF to 18.3 TCF this year, while another 3 TCF of possible
reserves were identified in the fields discovered to date.  The reserves are
located within the Wiriagar, Berau and Muturi blocks in Berau Bay, Irian Jaya,
Indonesia.

D&M's estimates were based on reservoir data obtained from 13 additional
wells drilled since last year's reserve certification announced in September.
Drilling activity peaked early in 1998 with as many as five rigs operating
delineation wells in Berau Bay at one point.

These certified proved reserves form the basis for the current Tangguh LNG
marketing effort by Pertamina, Indonesia's state oil company and marketer of
all Indonesian LNG.  Pertamina will sell the proved Tangguh reserves under the
standard long-term contracts which have defined the Asia-Pacific LNG trade.

It is intended that ARCO will have operational responsibility for the
certified fields within the three blocks feeding gas to the LNG plant and will
also be the downstream/marketing representative of the producer companies with
Pertamina for the first two trains of the LNG project.

"The Tangguh LNG project is poised to exceed Arun's total gas reserve base
and comes at an optimal time for Pertamina and Indonesia," said Leon Codron,
President and Resident Manager of ARCO Indonesia, Inc.

"This massive replacement of reserves will allow Pertamina to maintain its
pre-eminent position in Asian and world LNG marketing and return significant
revenues to the people of Indonesia for national development at a pivotal time
for the economy.  ARCO and its co-venturers are proud to invest, with
confidence, in the economic recovery and long-term success of Indonesia."

Codron said that Pertamina and its production sharing contractors plan to launch
the Tangguh LNG Project with a two-train, 6-million tons per annum first phase.
"These gas reserves will comfortably support at least three trains of LNG
production, allowing Tangguh to support traditional and emerging markets of the
Asia-Pacific region.  Tangguh has become the leading grassroots LNG development
available to Asia-Pacific markets as a result of the ideal location close to
markets, the prolific nature of the reservoirs with high quality gas, and the
low cost of development."

According to Herb Vogel,  ARCO Indonesia's Vice President for Tangguh LNG,
Tangguh will become Indonesia's third multi-train center, providing Pertamina
the flexibility and reliability that no other LNG marketer can attain.  The
additional exploration potential of the Wiriagar, Berau, and Muturi blocks, as
well as relatively unexplored adjacent blocks, insure that Tangguh will become
another center for Indonesia's LNG business."

Frank Chapman, BG plc Executive Director for Exploration and Production,
said: "Thanks to the cooperation between Pertamina and the various partners,
the speed at which this project has materialized from a rank exploration
prospect in 1994 is impressive.  I am delighted that our drilling program
identified such significant quantities of gas."

SOURCE ARCO

NOTE TO EDITORS: 1) Berau PSC Workinq Interest owners are ARCO (48%),
Occidental Berau of Indonesia, Inc. (22.856%), Nippon Oil Exploration (Berau)
Ltd. (17.144%), and KG Berau Petroleum Ltd. (12%).
2) Wiriagar PSC Working Interest owners are ARCO (80%) and KG Wiriagar
Petroleum Ltd. (20%).
3) Muturi PSC Working Interest owners are BG Exploration and Production,
Ltd. (52.63%) and Cairns, Ltd. (47.37%).
4) Last year, ARCO announced proved and probable reserves levels of 13.3 TCF,
based on the results of 13 wells.  The increase in proved plus probable qas
reserves levels released today represent additional data from the results of an
additional 13 wells.
5) Certified proved and probable reserves distribution by Production Sharing
Contract Areas, based on the most recent estimates of DeGolyer & MacNaughton,
are as follows:

                               Proved               Proved Plus Probable*
Berau PSC                      10.3 TCF (71%)       12.4 TCF (68%)
Muturi PSC                      3.1 TCF (21%)        3.8 TCF (21%)
Wiriagar PSC                    1.0 TCF (8%)         2.1 TCF (11%)
                                14.4 TCF            18.3 TCF

*D&M reserve certificates qualify that probable reserves are not directly
comparable with proved reserves as they have not been adjusted in
consideration of additional risks.

CONTACT: Albert Greenstein of ARCO, 213-486-3384
         Web site: http://www.arco.com


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