BP Amoco PLC - Fthr re Merger with ARCO

RNS Number:7572D
BP Amoco PLC
13 January 2000


BP AMOCO AND ARCO RE-START MOVES TO CLOSE COMBINATION

BP Amoco and Atlantic Richfield Co (ARCO) said today they intend to take the
next formal step towards closing the combination of the two companies. They
accordingly propose to re-start the required 20-day notice, suspended on
November 2, 1999, to the US Federal Trade Commission (FTC).

The FTC has to date expressed concerns about the combination - concerns which
are not shared by the companies.

Whilst the companies firmly believe the combination would enlarge rather than
adversely affect competition, they have offered, but failed to get FTC
acceptance for, a range of measures designed to meet the FTC's expressed
concerns.

The companies accept that re-triggering the notice could prompt the FTC to
seek resolution of the issues through litigation.  The companies however
remain ready to pursue a constructive solution and a meeting has been arranged
with the FTC tomorrow (Friday, January 14, 2000) to discuss next steps.

Notes to Editors:

-BP Amoco and ARCO's proposed $26.8 billion combination was announced on
 April 1, 1999, with synergies and cost-savings estimated at $1 billion a year

-Currently, BP Amoco neither refines nor markets on the US West Coast

-Alaska North Slope (ANS) crude is part of the world crude market, as shown
 by the fact that its prices closely correlate with the prices of other major
 crudes with which it competes in the global crude market

-In December 1999, BP Amoco secured Alaskan agreement for the deal after
 agreeing a package of measures with Governor Tony Knowles which included
 divestments of 175,000 barrels a day of Alaskan production and 620,000 acres 
 of state and federal explorations lands, along with the sale of a matching   
 stake in the Trans-Alaska pipeline and the sale or transfer of Jones Act   
ships to buyers of production - actions facilitating the entry of one or more
major new  operators in the state

- Total ANS output from all Alaskan producers, amounting to over one million
 barrels a day, meets  some 40 per cent of US West Coast refiners' needs, with
 the balance supplied from Californian production and imports

- The companies have also made a number of additional offers to meet the
 FTC's concerns, including the proposed allocation of a further 210,000
barrels a day to third-party buyers under long-term contracts

- Net of oil royalties to Alaska, BP Amoco and ARCO between them supply some
 700,000 barrels a day of ANS. Including the royalty volumes sold on behalf of
 the state, but after the disposal of 175,000 barrels a day agreed with Alaska
 and the proposed allocation of a further 210,000 barrels a day to third-party
 buyers under long-term contracts, the oil available to the combined company
 would fall to some 400,000 barrels a day, just sufficient to meet the daily
ANS requirement for ARCO's US West Coast refineries

- In December the company met the concerns of the Governor of California with
 an assurance that BP Amoco would maintain ARCO's high-volume, low-price
 marketing strategy and a pledge to eliminate MTBE as an additive to the
gasoline produced at ARCO's Californian refinery, a year earlier than
mandated.


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