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NEWS BULLETIN

October 12, 1999 --- Vol. 5, No. 49October 1999

BP Exploration, ARCO Alaska set size of Alaska operation

The job loss in Alaska will be marginally lower than originally estimated at the completion of BP Amoco’s acquisition of ARCO.

BP Exploration (Alaska) Inc. and ARCO Alaska Inc. said Oct. 11 that the new organization in Alaska would have 1,840 positions, a loss of an estimated 375 as opposed to the 400 position loss originally estimated.

The companies said that they have agreed on the shape, management team and personnel levels of the new organization that will run their joint business in Alaska should the combination of their parent companies be approved by state and federal regulators.

Designed for competitive operation

BP Exploration (Alaska) said the new organization has been designed to ensure that the cost of operating existing North Slope production and developing new fields remains sufficiently competitive to enable the new group to meet its target of growing North Slope production by some 150,000 barrels a day over the next five years.

“What we have is a structure for an exciting new company,” said Richard Campbell, president of BP Exploration (Alaska). “When the ARCO combination is completed, the new organization will begin working with the state, our partners, our contractors and suppliers to create a bright new day for Alaska.

“The new company is sized to support and operate all of the current assets of both companies and to realize the efficiencies, the investment opportunities and the North Slope production growth we are counting on the union of our two companies to deliver,” Campbell said.

Combining Alaska operations of the two companies will result in the elimination of an estimated 375 positions, Campbell said. This is marginally lower than the initial estimate of 400 position losses but will preserve all the synergies originally envisaged.

Final size adjusted if assets change

Campbell said the final size and shape of the planned organization may be adjusted if the assets owned and operated by the combined company changes as a result of continuing discussions with the state of Alaska.

BP said the new organization was designed by the BP Exploration and ARCO Alaska personnel who will lead it. Business unit and team leaders for the combined organization were announced earlier.

The next step in building the combined company is the selection of first line supervisors for key North Slope production facilities. Other staff selections will not be announced until after the ARCO acquisition is completed. Employees will know their status as soon as possible after the transaction closes, with all notifications occurring within 30 days.

“A lot of talented people with tremendous Alaska experience will be joining BP’s strong Alaska team,” Campbell said. “The result is going to be a company with the know-how, the Alaska experience, the cost structure, the assets and the resource base to do great things for Alaska and for BP Amoco.”

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