BP Amoco and ARCO Agree To Sell Alaska Businesses For $7 Billion

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15 March 2000

BP Amoco and Atlantic Richfield Co (ARCO) today announced that they have agreed to sell ARCO's Alaskan businesses to Phillips Petroleum Co of Bartlesville, Oklahoma for $7 billion.

The sale, which is subject to completion of the ARCO combination, is intended to address anti-trust concerns of the U.S. Federal Trade Commission (FTC). BP Amoco is currently in negotiation with the FTC to obtain a consent order for the combination which was announced last April.

BP Amoco and ARCO have agreed jointly with the FTC, the U.S. West Coast states and Alaska to suspend litigation - originally scheduled to begin in California on 20 March - pending the outcome of those negotiations.

BP Amoco chief executive Sir John Browne and ARCO chairman Mike Bowlin said: "After months of uncertainty for staff and customers of BP Amoco and ARCO, and the states and communities where we operate, we are pleased to be in discussions with the FTC. Those discussions are constructive and today's sale agreement greatly advances the prospects for their successful conclusion."

Browne described the price for the Alaskan businesses as "highly competitive" and said that the combination with ARCO remained an excellent deal for BP Amoco.

The sale to Phillips of all ARCO's Alaskan businesses includes a 21.9% interest in the Prudhoe Bay oil rim and 42.6% of the gas cap, a 55% interest in the greater Kuparuk area and a 78% stake in the Alpine field. The package also includes 1.1 million net exploration acres, a 22.3% interest in the Trans-Alaska pipeline, and ARCO's crude oil shipping fleet which includes six tankers in service and three under construction. The booked reserves being sold total 1.9 billion barrels of oil equivalent.

The $7 billion price for the Alaskan businesses is made up of approximately $6.5 billion for the field, pipeline and shipping operations and assets, plus a supplemental payment of $500 million accruing as the WTI crude price exceeds $25 a barrel, retroactive to 1 January. There will also be a payment of some $150 million for crude oil inventories.

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