Bp Amoco Is Cooking With Gas

The Arco buy brings gas reserves that may heat up its future

Poor John Browne. When the chief executive of BP Amoco PLC announced a little more than a year ago that he would buy Atlantic Richfield Co. for $27 billion, all eyes turned toward Alaska and oil. The grand prize was clearly a greater slice of the giant Prudhoe Bay oil discovery that put Arco on the map 30 years ago. Then the feds stepped in. To win the approval of the Federal Trade Commission, Arco had to sell its Alaskan assets to Phillips Petroleum Co. for $7 billion. For many investors and analysts, the April merger of BP Amoco and a scaled-back Arco was an anticlimax. "People think Browne bought an empty house," says Fadel Gheit, an oil analyst at Fahnestock & Co.

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