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LONG-TERM PROSPECTS ARE BRIGHT, ARCO CHAIRMAN TELLS STOCKHOLDERS

 LONG-TERM PROSPECTS ARE BRIGHT, ARCO CHAIRMAN TELLS STOCKHOLDERS
 LOS ANGELES, May 4 /PRNewswire/ -- ARCO (NYSE: ARC) chairman and chief executive officer Lodwrick M. Cook said today that ARCO's first quarter earnings reflect the current economic environment, not the company's long-term prospects, which he said were "as bright as they have ever been."
 Speaking at the annual meeting of ARCO stockholders in downtown Los Angeles, Cook and ARCO president Robert E. Wycoff cited a number of positive signs for the company's future:
 -- ARCO's worldwide oil and gas reserves today are higher than they were seven years ago when the company underwent a massive restructuring;
 -- ARCO's international oil and gas company made significant progress during 1991, acquiring new acreage, developing new projects and discovering 25 million barrels of oil equivalent (BOE) of proved reserves and 190 million BOE of potential reserves at an average finding cost of about $1.19 per barrel;
 -- Year-end 1991 oil and gas reserves stood at 27 barrels per share on an oil equivalent basis, up from 17 barrels per share before the 1985 restructuring;
 -- With last year's discovery of oil in Cook Inlet, Alaska, continued progress in developing the Point McIntyre field, and the industry's most active Alaskan exploration program, ARCO remains optimistic about prospects in Alaska;
 -- With development of its EC-X formulation last year, ARCO maintained its leadership in the field of cleaner-burning gasoline. The company will begin refinery modernization to produce the new fuel once regulatory hurdles are overcome;
 -- Start-up of a new world-class propylene oxide/styrene monomer facility later this year will make ARCO Chemical Co. (NYSE: RCM) the largest styrene producer in the Americas and Asian Pacific region; and
 -- A dramatic increase in demand for high quality, low sulfur coal should have a long-term positive effect on ARCO's coal operations.
 Reviewing the world oil and gas situation, Cook said, "ARCO continues to have a generally positive view about the outlook for crude oil prices in the intermediate to long term. In the U.S. natural gas industry, we do not have a positive picture. We have had to change and change again our assumptions as natural gas prices have continued to be weak."
 Cook said that domestic natural gas investments will be limited, with concentration on areas where the company can expect to earn an acceptable return in a low-price environment. Overseas, natural gas economics are more favorable, often because there is one national buyer interested in securing long-term supply. "As a result, ARCO will continue to invest in crude oil worldwide and in natural gas overseas."
 Cook also noted that since the end of the 1992 first quarter when ARCO reported a year-to-year net income decline from $351 million to $180 million, oil prices have improved somewhat, although domestic natural gas prices are still at reduced levels. Gasoline prices have also risen since March 31, he said.
 Referring to the cyclical nature of the energy industry, Cook said, "The danger in our business is the tendency to think that either the peak or the valley will go on forever, and yet history proves this is not so."
 Cook reaffirmed that ARCO is making no fundamental changes in its business strategies. "ARCO will continue to be hydrocarbon based. We focus on quality assets which give us low-cost and competitive differentiation. We continue to evaluate the capital markets for opportunities and we will maintain appropriate financial leverage."
 Turning to ARCO Chemical Co., in which ARCO has an 83.4 percent interest, and Lyondell Petrochemical Co. (NYSE: LYO), in which ARCO has 49.9 percent ownership, Cook said both companies have bright futures because of their unique assets and strong market positions -- ARCO Chemical as the world's largest producer of MTBE and propylene oxide; Lyondell as the fourth largest U.S. producer of olefins and second largest producer of methanol.
 "We continue to believe that both ARCO Chemical and Lyondell are positive contributors to ARCO, although, like ARCO, they will be impacted by peaks and valleys."
 -0- 5/4/92
 /CONTACT: Albert Greenstein of ARCO, 213-486-3384/
 (ARC RCM LYO) CO: ARCO; ARCO Chemical Co.; Lyondell Petrochemical Co. ST: California IN: OIL SU:


KJ-CH -- LA011 -- 6076 05/04/92 13:03 EDT
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Publication:PR Newswire
Date:May 4, 1992
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