International and Domestic Expansion Targeted

    NEWTOWN SQUARE, Pa., Dec. 10 /PRNewswire/ -- ARCO Chemical Company
(NYSE: RCM) announced today that its board of directors has approved a
five-year capital spending program for the years 1997-2001.  In addition, the
company's capital spending program for 1996 was increased to reflect the
recent acquisition of Olin Corporation's isocyanates business.
    For 1996, ARCO Chemical's capital spending program is set at $750 million,
including amounts allocated for the purchase of Olin Corporation's isocyanates
business. For 1997, $450 million has been budgeted for capital spending for
all of the company's businesses.
    For the five-year period spanning 1997-2001, $2.6 billion has been
budgeted for capital spending.  About 70% (or $1.8 billion) of this five-year
budget is targeted for growth projects in the company's core urethanes and
performance chemicals businesses. These projects include expansion of the
PO/SM (propylene oxide/styrene monomer) and BDO (butanediol) facilities at
Channelview, Texas and construction of new world scale PO/SM and BDO
facilities in Rotterdam, the Netherlands.
    The remaining 30% of the five-year budget is targeted for environmental,
health and safety projects, caretaker and maintenance projects, and
administrative programs.
    Alan R. Hirsig, President and Chief Executive Officer, observed, "Our new
capital spending plan will implement ARCO Chemical Company's long-term
strategy of focusing on the core PO businesses, integrating an even greater
share of our production into value-added derivatives, and maintaining the
company's technological superiority."
    The company expects to fund its capital spending program through operating
cash flows supported by the flexibility it has for either refinancing or
additional borrowing.
    ARCO Chemical Company is a leading worldwide manufacturer and marketer
of propylene oxide and derivatives and other intermediate chemicals.  Its
products are used in a wide range of consumer and industrial goods, including
automotive components, cushioning, paints and coatings, plastics, home
furnishings, engine coolants and reformulated gasoline.

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