RNS No 5441c
ATLANTIC RICHFIELD COMPANY
15th May 1998



ARCO, Sasol, Zarara Sign Production Sharing Agreement for Mozambique Exploration
Program

MAPUTO, Mozambique -- A Production Sharing Agreement to explore for natural gas
in Mozambique was signed today by the government of Mozambique, the state oil
company of Mozambique, a subsidiary of Los Angeles-based ARCO, and two South
African companies, Sasol Petroleum International (Pty) Ltd. and Zarara Petroleum
Resources.

The PSA relates to the Temane Gas Field where the Temane Group (ARCO Mozambique
(Temane) Ltd., SPI and Zarara) have interests of 47.62%, 47.62% and 4.76%
respectively. ARCO is the operator.

The agreement stipulates the commercial and fiscal arrangement between the
Mozambican government, the state oil company Empresa Nacional de Hidrocarbonetos
de Mocambique (ENH) and the Temane Group.

The agreement calls for the consortium to conduct a seismic survey and drill up
to five wells in the Temane block within a 7-year period. The first well will be
drilled by June, 1998. Should gas be found, further wells will be drilled to
assess the potential size of the field. The consortium also agreed to invest
about US $10 million during this period in drilling and seismic work.

The commitment includes financial assistance for the training of Mozambican
citizens, the awarding of contracts to deserving Mozambican companies and the
development of related exploration infrastructure. The Temane Group intends to
supply gas from Temane to JCI's planned iron project in Beira and to various
markets in South Africa.

The Temane Group entered into a Technical Evaluation Agreement with JCI for the
Temane Block in July, 1997, and together with ENH, has done a series of studies
to determine the size of gas reserves in Temane. The Temane Group and its
partners have interests in three exploration blocks in Mozambique, namely
Temane, Sofala and M-10.

NOTE TO EDITORS: For a menu of ARCO news releases or to retrieve a specific
release, visit ARCO's Web site at http://www.arco.com on the Internet.

CONTACT: Albert Greenstein of ARCO, 213-486-3384

Web site: http://www.arco.com


END

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