Arco Preparing Proposal for Saudi Arabia

Atlantic Richfield Co., the sixth-largest U.S. oil company, said it’s close to sending a project proposal to Saudi Arabian oil officials as the oil-rich kingdom considers opening its fields to U.S. companies for the first time in more than 25 years. Saudi officials asked for ideas on how to develop the country’s vast energy resources when they met with Arco Chief Executive Michael Bowlin and heads of other major U.S. oil companies in September. “We’re in the final stages of preparing a response,” said Linda Dozier, a spokeswoman at Los Angeles-based Arco. Saudi Arabia expelled foreign oil companies in the 1970s amid a wave of nationalization and resentment about U.S. support of Israel. Now, analysts say Saudi Arabia is rethinking its policy because its revenue has been slashed by low crude oil prices and it’s having difficulty developing its oil and natural gas resources on its own. Besides Arco, Texaco Inc., Conoco Inc., Chevron Corp. and Phillips Petroleum Co. have all stated plans to talk to the Saudis about possible projects. Arco shares fell $1.19 to close at $63.06 on the New York Stock Exchange. Oil prices on the New York Mercantile Exchange dropped 58 cents to $12.31 a barrel.

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