Result of EGM

BP AMOCO PLC
1 September 1999



ADDRESSES TO SHAREHOLDERS AT THE EXTRAORDINARY GENERAL 
MEETING OF 
BP AMOCO P.L.C., SEPTEMBER 1, 1999
BY CO-CHAIRMEN PETER SUTHERLAND, SC AND LARRY FULLER, AND 
CHIEF EXECUTIVE SIR JOHN BROWNE


Peter Sutherland

Thank you all for coming to this Extraordinary General 
Meeting to consider BP Amoco's combination with the 
Atlantic Richfield Company, otherwise known as ARCO, and 
changes to the Company's share capital and articles of 
association. 

Seated on the stage with me are Larry Fuller, my Co-
Chairman; Sir John Browne, BP Amoco's Group Chief Executive 
and an Executive Director; John Buchanan, Chief Financial 
Officer and an Executive Director; and Judith Hanratty, the 
Company Secretary. Also with us in the auditorium are other 
Board members, our senior executives, and advisers. 

We appreciate that you have been called to three 
shareholder meetings in less than a year. This is 
indicative of both the pace of progress within BP Amoco and 
the dynamic nature of today's business environment. Our 
commitment and determination to push BP Amoco ahead of all 
its rivals is evident in the schedule we have set for 
ourselves. This is not a world in which anyone can hope to 
stand still and prosper. You must seize opportunities as 
and when they arise, and that is what we are doing at this 
meeting.

But this doesn't mean we take for granted your attendance 
here this morning. It is less than a year since we met in 
this same hall to consider BP's merger with Amoco, which I 
described on that occasion as 'historic'. Today, we are due 
to discuss one of BP Amoco's first major decisions as a 
newly merged company, and I believe that this decision too 
will prove to be highly significant in the company's 
history.  

You should have all received a copy of the letter from 
Larry Fuller and myself dated July 15 and the Circular to 
shareholders. Our business today is described on page 124 
of that Circular which sets out the resolutions we have to 
consider. You will also find all six resolutions inside the 
Programme provided with your Admissions Packet for this 
meeting.  Our letter and the Circular explain the 
background and the reasons for the rather technical 
resolutions before you today.  

Let me tell you briefly how I intend to proceed.  First, I 
will formally convene the meeting.  Then we will consider, 
discuss and vote on each resolution in its turn. As this is 
a special General Meeting the discussion will be directed 
to the particular resolutions we are considering here 
today. 

Now, a word about voting.  You may recall that last year 
you approved changes to the company's articles of 
association, relating to the voting procedure at general 
meetings.  These require special resolutions to be decided 
by poll.  Resolutions 5 and 6 before us today are special 
resolutions, and a poll on these items will be held at the 
end of today's meeting. 

Additionally, as required by the Stock Exchange, we will 
indicate on the screen behind me the level of support for 
and against each resolution received through the proxy 
process.  I will therefore now start with the first formal 
item of business and, unless there are any objections, I 
will take the Notice convening the meeting as read.  

Thank you.  I now move the first Resolution, relating to 
the combination with ARCO, which again is set out both in 
the Circular and in your Programme.  If there are no 
objections, I propose to take the Resolution as read.

Let me put this proposal in context and explain briefly why 
your Board recommends that you vote in favour of the 
combination. John Browne, our Group Chief Executive, will 
then provide details on the strategic rationale for the 
combination.  This transaction has of course raised some 
competition issues, and Larry Fuller will provide further 
background to that as we proceed. 

Without in any way pre-empting our discussion today I 
should perhaps also add at this point that two days ago in 
Los Angeles, the shareholders of Atlantic Richfield gave 
their approval to the combination by a margin of 97.36 per 
cent of the votes cast.

As Larry Fuller and I indicated in our letter to you of 
July 15, ARCO originally considered a combination not only 
with our company, but also with Exxon and Shell as well as 
with certain other companies. ARCO concluded that the 
greatest opportunities for synergies and enhanced 
shareholder value would be created by combining with 
ourselves.

We then had to consider this proposal from the perspective 
of our own shareholders, and it quickly became evident that 
as we had expected there were indeed significant advantages 
in bringing our two companies together. Quite simply, we 
fit together very well.  ARCO is a world-wide oil and gas 
enterprise and many of the areas in which it has a 
significant presence -- such as Alaska, the Gulf of Mexico 
and the UK North Sea -- are places of importance to us too.  
We share ARCO's view that there are great opportunities for 
synergies and enhanced shareholder value through a 
combination between us.

For example, combining the Alaskan oil assets of BP Amoco 
and ARCO will provide us with opportunities for significant 
rationalisations and incentives for new investment.  It 
will help us to become more efficient and competitive, and 
will justify a new phase of investigation into the 
feasibility of bringing Alaskan North Slope gas deposits 
into production.

Downstream in the United States, the combination of ARCO's 
leading position in refining and marketing on the west 
coast with BP Amoco's substantial position in the rest of 
the US will allow us to compete on an equal footing coast-
to-coast with other major marketers of gasoline.

Our merger with Amoco made us one of the three largest 
integrated oil and gas companies by market capitalisation.  
But we now want to take this even further.  The combination 
with ARCO will also make BP Amoco an even more significant 
player on the international stage.  We shall become the 
largest non-state owned oil producer in the world, as well 
as the largest oil and gas producer in both the US and the 
UK. We will be the second largest non-state owned gas 
producer in the world.  We shall occupy a major position in 
East Asia, adding in particular significant growth 
interests in Thailand, Malaysia and Indonesia.

On that note I will turn to John Browne and ask him to 
elaborate further on this transaction. 


Sir John Browne

Ladies and Gentlemen good morning.  I'd like to join 
Peter in welcoming you all today.  This is  a very 
significant day in the history of  BP Amoco -- because 
this is the first major venture of your new company.  I 
want to cover four things this morning.

First, the strategic logic of the combination with ARCO 
which we are proposing;  second, the  terms of the 
transaction; thirdly, the improvement in performance 
which we aim to deliver once this transaction is 
completed; and fourthly, a progress report on the 
processes for securing approval of the combination, and 
the plans we're making for integration of the two 
organisations.

So let me start with the strategic logic.  Bringing 
together BP Amoco and ARCO  gives us a series of 
distinctive competitive opportunities  and positions us 
for growth in some of the most exciting markets in the 
world.

First, it gives us the potential to extend the life and 
to increase the value of the remaining resource base in 
Alaska because it gives us the chance to improve the 
economics of our operations, by reducing our current 
costs by around 80 cents a barrel.  That will make Alaska 
much more competitive as a place for investment. 

In addition, we expect to be able to increase the total 
resource base through continued exploration success.  So 
there's huge potential if we can get the costs right -- 
and that's exactly what we want to achieve through this 
transaction.

One of the most exciting longer term opportunities is the 
development of the very large  unbooked gas resource.  We 
have to find a way of doing that - economically. 
We want to explore all the possibilities - a pipeline, 
LNG, or conversion of the gas to a room temperature 
liquid.   Part of that process will be to establish a 
pilot plant in Alaska -- using existing infrastructure -- 
to test whether that technology can be made commercially 
viable.

The second strategic benefit of this transaction is the 
opportunity to grow the gas business  - particularly in 
the Far East.   

A year ago BP alone was producing just 1.7 billion cubic 
feet a day of gas world-wide.   The merger with Amoco 
took that up to 5.8 billion cubic feet a day and this 
transaction should increase it to around 8 billion cubic 
feet a day; an eight-fold increase in BP's gas production 
over 10 years. 

Gas will then represent more than a third of our total 
production and around 40 per cent of booked reserves with 
many areas holding the potential for further growth.

One particularly interesting prospect for the medium and 
longer term is the Tangguh field in Indonesia.  That 
field is one of the most attractive potential new LNG 
projects, with at least 14 trillion cubic feet of gas.  
The ARCO combination  will give us a net interest there 
of at least 5 to 6 trillion cubic feet, and the 
operatorship.

Both in terms of cost and geography, Tannguh is highly 
advantaged, and will give us the opportunity to meet the 
growing demand for gas in Japan, southern China and 
elsewhere in the Far East.   

The third area of strategic advantage is in the US 
downstream.  ARCO owns two of the best refineries in the 
whole of the US, namely Cherry Point in Washington State 
and Carson in California.  These two refineries can 
produce clean fuels which are at the heart of our new 
offer to the consumer.   

In marketing,  the combination will  give us access to 
California and the other four states on the West Coast, 
where ARCO have a market share of 18 per cent.  ARCO has 
a very strong marketing presence with a unique 
convenience store offer -- called am/pm.  We can learn a 
lot from their success.

The fit between ARCO's refining and marketing assets and 
our own is excellent and there's no material overlap 
between the assets of the two companies.  Putting the two 
companies together will give us a coast to coast 
marketing presence in the US with a share in the gasoline 
market of around 13 per cent, allowing us to compete as a 
market leader.

So bringing the two companies together should give us 
unique advantages in Alaska, in the gas business and in 
the US downstream, as well as some excellent positions in 
the deep water Gulf of Mexico, in the lower 48 through 
Vastar, in Algeria and in the Southern North Sea.  

Of course, as we review the combined portfolio there'll 
be things that don't fit  with the strategy for BP Amoco 
which we  presented to you recently.   So there'll be a 
programme of disposals amounting in total to perhaps $3 
billion worth of assets.

What will the new company look like?

Let's start with the geography.  Fifteen months ago -- 
before we merged with Amoco - we had a strong upstream 
base in the North Sea and Alaska, a significant 
downstream presence in Europe and the US, chemicals 
interests in Europe, the US and Asia, and significant 
growth activities in the Caspian, West Africa, the Gulf 
of Mexico, Latin America, Eastern Europe and the Far 
East.

With the BP Amoco merger completed we now have, 
additionally, a strong presence in the US downstream and 
chemicals businesses, together with strengthened upstream 
interests in gas in the Lower 48, in Trinidad, Egypt, and 
the Caspian.

When the combination of BP Amoco and ARCO is completed -- 
which we believe should be possible before the end of 
this year -- we'll be the largest non-state producer of 
oil in the world, producing nearly 3 million barrels a 
day or 4 per cent of world output.

We'll be the second largest non state producer of gas in 
the world -- producing 7.9 billion cubic feet a day 
world-wide.   And we'll have reserves of over 11 billion 
barrels of oil and over 42 trillion cubic feet of gas.  
That will be our starting point for the new century.

Overall more than 70 per cent of the capital employed in 
the new company will be in the OECD world -- with just 
under 50 per cent in the United States -- with some 
excellent opportunities for growth beyond that -- 
particularly in Asia, which despite the economic 
difficulties of the last two years still contains some of 
the fastest growing economies in the world.

In terms of the balance of the business, nearly 70 per 
cent of the capital employed will be upstream, with more 
than a third in gas; 20 per cent  will be downstream, and 
around 10 per cent will be in chemicals.  So the 
combination gives us a set of options for growth -- 
founded on strong performance, which this combination 
should improve still further.  

The combination will increase our know-how, our technical 
base, and our skills in some areas which we believe are 
critical for the future of the industry.  

And of course it will make us bigger.  On the basis of 
the valuations at yesterday's close the combined market 
capitalisation of BP Amoco and ARCO is now over $200 
billion.   

Of course, scale carries some advantages.   But size is 
not the motivation behind this and we're very conscious 
that we have to work to ensure that we counter the 
negative elements which size can bring.  We have to 
retain our commitment to performance and we have to 
ensure that we never lose the ability to listen and to 
learn.

What about the  terms for the transaction?

The Boards of BP Amoco and ARCO have agreed that this 
should be an all share deal -- exchanging BP Amoco shares 
for the outstanding shares of ARCO.  There will be no 
cash payment.

The exchange ratio -- based on the figures before the 
share split which Peter will talk about later -- will be 
0.82 of a BP Amoco ADS, or 4.92 BP Amoco ordinary shares 
for each ARCO share. The completion of the transaction 
will therefore require the issue of  some 1. 6 billion 
ordinary shares.  

Over the three months before we announced the transaction 
at the beginning of April that represented a premium of 
just 19 per cent.  The terms were agreed when oil prices 
were around half what they are today.  During the first 
quarter of this year the Brent oil price averaged just 
over $11 a barrel.  Over the last week it has averaged 
over $20 per barrel.

So we believe this is an excellent transaction for BP 
Amoco shareholders, with a very positive impact on our 
financial position.  

Let me now turn to performance and in particular to the 
potential for the significant improvement which this 
transaction offers.

ARCO's  cash costs in 1998 amounted to around $ 4 billion 
per annum and they've  already made good progress on 
their plans to reduce those costs by some $500 million 
per year.  On top of that, we've identified an estimated 
$1 billion of pre-tax cost savings resulting from the 
combination of the two companies.

Overall,  $700 million of savings would come from the 
upstream, with around half of that coming from a tight 
focusing of the exploration programme.  The remainder -- 
some $300 million -- would come from synergies in the 
downstream business,  and from the rationalisation of  
corporate headquarters.   

These are hard synergies.  The $1 billion number doesn't 
include any savings from the extension of best practice 
or from improved revenues.  In terms of staff numbers our 
estimate is that, in addition to the changes arising from 
ARCO's existing plans, we expect to see a reduction of 
around 2,000 posts.

Our plan is to deliver those synergies over a period of 
two years with around $600 million coming in the first 
year.   

The changes made in the recent UK Finance Act mean that 
the acquisition will cost over  $400 million in stamp 
duty and we also expect to spend around $600 million on 
restructuring and severance costs and on transaction 
fees.  

Those costs should be incurred in the first year after 
completion, and we expect payback in the second year.

As I mentioned earlier we will dispose of assets which 
don't fit with the strategic balance we're seeking to 
establish.  That should amount to around $3 billion in 
total and may include, as we said when we announced the 
transaction, the sale of some of our interests in Alaska. 

Now let me turn to the accounting and financial issues. 
As you know this transaction will be accounted for in 
technical terms as a purchase in the UK and in the US.  
That means that the difference between the book value of 
ARCO's assets and the price we're paying will lead to 
amortisation and depreciation charges.  There'll be a 
charge to our profits, which we estimate at around $2 
billion a year initially.  Let me stress that this is a 
non cash charge. 

We'll continue to report our financial results on a UK 
GAAP basis, which means they'll reflect that accounting 
charge.  But that accounting charge doesn't affect our 
cash flow or the value of the company and it  won't 
affect the way we manage our performance or our dividend  
policy.  Our focus as you know is on cash and we believe 
this transaction will make a strong and positive 
contribution to cashflow per share in the first year. 

In the first full year, including only some of the 
expected synergy benefits and before one off transaction 
charges, we expect the deal to be accretive to earnings -
-before the accounting effects I talked about a moment 
ago -- at anything above $10 oil prices.

As Peter said this transaction has raised regulatory 
issues in the US and Europe.  I'd now like to ask Larry 
Fuller who has been guiding us through all this to say a 
few words about the progress we've made so far.


Larry Fuller 

Thank you, John.  I am pleased to describe for you the 
progress we have made in obtaining approvals in the United 
States and Europe.

Turning to the United States, there has been a particular 
interest in the State of Alaska over the combination.  This 
is understandable, given the prominent role BP and ARCO 
play in the Alaskan oil industry and the central role that 
industry occupies in the state's economy.  We have had some 
very constructive discussions with senior members of the 
executive branch of state government and with the 
legislature in Alaska.

Following these discussions, Alaska's Governor last week 
indicated publicly the range and nature of the undertakings 
he is considering BP Amoco would need to agree to as a 
precondition to his acceptance of the proposed combination 
with ARCO.

At the same time we have continued our normal process of 
reviewing assets and potential divestments, identifying the 
steps we ourselves would like to take as part of any normal 
asset rationalisation.  The Governor's comments, taken 
together with BP Amoco's own review of our assets 
portfolio, will be the foundation for our further 
discussions with the State.

I am confident that we will reach an appropriate accord 
which will enable us to achieve greater economies and cost 
effectiveness.  The reduced costs will encourage new 
investment and lead to increased crude oil production.  
More efficient operations will also permit investigation 
into the feasibility of developing additional Alaskan North 
Slope resources for the benefit of the people in Alaska.

In addition to Alaska, we have received requests for 
information from the states of California, Oregon and 
Washington. These states are reviewing the proposed 
combination to assure themselves that it does not reduce 
competition and place consumers at a disadvantage.  We 
believe we can demonstrate to them that there is little 
relevant overlap between the companies, and therefore, 
competition will not be lessened.

We have been working closely and constructively with US and 
European regulatory authorities to articulate our position 
and provide supporting documentation.  I believe we have 
made a strong showing that the combination of BP Amoco and 
ARCO does not create insuperable competition law concerns.

Specifically, on May 4, 1999, we filed with the European 
Commission a merger notification that sought approval of 
the combination.  On June 10, the European Commission 
initiated a Phase II investigation into the combination's 
competitive effects within the European Community.  We 
continue to have productive discussions with the Commission 
and expect the Commission to complete its review over the 
next few weeks.

On May 18 we filed the required notification with the US 
Federal Trade Commission. Since that filing, the Commission 
has issued a broad request for documents and information, 
and we are responding to that request as quickly as 
possible.  In addition, we have participated in several 
meetings with the Commission staff and presented our views 
on the issues.  We are continuing to work with the staff 
with the aim of answering all their questions and 
satisfying any concerns they may have.

We are encouraged by the progress made to date and believe 
we are currently on track to meet our target for closing 
the transaction before the end of the year.  In parallel, 
John and his team have been preparing for the integration 
of these two organisations. I will now hand you back to 
John to outline further our plans in this respect.


Sir John Browne

Thanks Larry , and thank you for all your wise counsel on 
these important issues.

As well as securing those approvals we've begun to get 
ready to integrate the two companies.  One of our most 
senior managers, Byron Grote, has been in charge of 
making those preparations and he and his team have been 
working very closely with ARCO's CEO Mike Bowlin and his 
colleagues.  

The integration plan is now in place, and ready for 
implementation as soon as the transaction is closed.  

The combined  organisation will continue to be based on 
the business unit structure which has proved very 
effective within BP Amoco.  

There'll be a single set of management processes covering 
everything from the control and auditing functions, to 
the standards we set for our relationships with staff and 
with the communities in which we work.

In preparation for the enlarged organisation we've 
already named almost 150 executives and team leaders and 
we're well advanced in our preparations to be able to 
name people to several hundred more positions.

As Byron and his team have gone through that process 
we've become well acquainted with some tremendous people 
-- people who will make a great contribution to the 
future of the combined company.

As I said a moment ago our aim is to secure the necessary 
regulatory approvals for this transaction before the end 
of this year.  To ensure that the continued performance 
of BP Amoco's existing assets isn't damaged and that 
people aren't distracted, we've ring fenced both the 
process of integration planning and the work necessary to 
secure approvals.   That's worked well, as I think you'll 
have seen from the second quarter results.

To sum up:
 
* This is the first step by your new company -- a 
strategic step driven by the determination to combine 
performance and growth;
 
* The process of securing the necessary approvals and the 
planning for subsequent integration is well advanced 
and is not having a disruptive effect on the 
performance of the company;
 
* The transaction will give us some unique sources of 
competitive advantage -- in Alaska, in international 
gas and in the US downstream;
 
* And it offers a great opportunity -- to the shareholder 
in terms of performance and value but also, and equally 
importantly to the consumer -- in terms of quality and 
choice.

So today is a very good day for BP Amoco and I'd like to 
use this occasion to say thank you to all the people in 
BP Amoco who've made today possible.  It has been a 
wonderful team effort.

Ladies and gentlemen, thank you very much.