Occidental Joins Lyondell and Millennium in Equistar Partnership

-- Addition of ethylene, propylene and EO/EG businesses enhances

Equistar's cost position and diversifies downstream product mix.

-- Increases Equistar's synergy opportunities to more than $275 million

per year.

-- Creates world's second-largest ethylene producer, with total annual

revenues of almost $6 billion.

Mar 20, 1998, 00:00 ET from Lyondell Petrochemical Company

    HOUSTON, ISELIN, N.J., LONDON, England, LOS ANGELES, March 20 /PRNewswire/
 -- Lyondell Petrochemical Company (NYSE:   LYO), Millennium Chemicals Inc.
 (NYSE:   MCH) and Occidental Petroleum Corporation (NYSE:   OXY) today announced
 the signing of a definitive agreement to expand Equistar Chemicals, LP with
 the addition of the ethylene, propylene, ethylene oxide (EO) and derivatives
 businesses of Occidental Chemical Corporation, a subsidiary of Occidental
 Petroleum Corporation.
     The addition of the Occidental assets will make Equistar the second-
 largest producer of ethylene in the world, with more than 11.4 billion pounds
 of annual capacity.  It will bring Equistar's total propylene production
 capacity to almost 5 billion pounds, making it the world's third-largest
 producer.  Equistar is currently North America's largest producer of
     Launched in December 1997 as a joint venture of Lyondell and Millennium,
 Equistar was initially comprised primarily of the olefins and polymers
 businesses of the two companies.
     Following the closing of the agreement, which is expected to occur by mid-
 year 1998, Equistar will be owned 41% by Lyondell Petrochemical.  Millennium
 and Occidental will each have a 29.5% share.  Dan F. Smith, President and
 Chief Executive Officer of Lyondell, will also continue to serve as CEO of
 Equistar.  Eugene R. Allspach will continue to serve as Equistar's President
 and COO.
     As part of the transaction, Occidental is contributing the following:
     -- Olefins plants at Corpus Christi and Chocolate Bayou, TX, and Lake
        Charles, LA, producing 3.65 billion pounds per year of ethylene.
     -- Ethylene oxide, ethylene glycol and ethylene oxide derivatives
        businesses located at Bayport, TX, and Occidental's 50% ownership of PD
        Glycol, which operates EO/EG plants at Beaumont, TX.  (PD Glycol is a
        50/50 joint venture with DuPont.)
     -- A distribution system consisting of more than 950 miles of
        ethylene/propylene pipelines in the U.S. Gulf Coast and two storage
        wells in South Texas.
     -- $200 million of debt currently associated with these businesses.
     The partnership will borrow an additional $500 million upon the addition
 of Occidental's assets and will distribute cash of $425 million to Occidental
 Petroleum and $75 million to Millennium.  Equistar is expected to maintain its
 investment-grade debt rating.
     The transaction also includes a long-term agreement for Equistar to supply
 the ethylene requirements for Occidental's chloro vinyl business.
     "We believe Equistar sets the industry standard for the most efficient and
 cost effective method of operating these commodity chemical businesses," said
 Dan F. Smith, CEO of Lyondell and Equistar. "The addition of Occidental will
 enable us to increase annual profit improvement synergies for these combined
 businesses to more than $275 million in the year 2000.  This translates into
 additional earnings that are available to Lyondell and our partners during all
 parts of the business cycle."
     "Occidental is an excellent fit with the existing Equistar operations and
 can be readily integrated into our synergy-improvement and manufacturing-
 efficiency programs," Smith said.  "The proximity of the assets to Equistar's
 existing Gulf Coast facilities enables us to capture additional cost savings
 and efficiencies."
     "The addition of Occidental's ethylene, propylene, ethylene oxide and
 derivatives businesses provide added opportunity to drive down even further
 Equistar's already low-cost structure," said William M. Landuyt, Chairman and
 CEO of Millennium Chemicals Inc. and co-chairman of Equistar's Owner's
 Committee.  "The cost advantage afforded by the additional synergies and the
 $75 million cash that will be distributed to Millennium Chemicals combine for
 an EVA(R)-positive and earnings-accretive result."
     "We are pleased to be a part of Equistar," said Dale R. Laurance,
 President of Occidental Petroleum.  "The operating synergies and cost savings
 from the alliance will improve Occidental's earnings from its petrochemical
 assets and will significantly increase our return on assets in our
 petrochemicals segment.  In addition, it will contribute $625 million to our
 previously announced goal of raising $4.7 billion to fund the purchase of the
 Elk Hills field and our common stock repurchase program."
     The benefits of the Occidental addition to the Equistar partnership
     -- Increased total value creation from Equistar through additional
        synergies generated by leveraging costs over a larger asset base. Cost
        efficiencies have been identified in areas such as: manufacturing,
        purchasing, transportation and staffing consolidation.
     -- Opportunity to expand into less cyclical, higher margin markets, which
        include a significant specialty product component, through EO
        derivatives.  Ethylene oxide derivatives are used by customers to make
        detergents, coatings, automotive fluids and cleaning products.
     -- Reduced average cost of Equistar's ethylene production. More than two-
        thirds of Occidental's ethylene production is from flexible crackers,
        meaning that they are able to use a wide variety of feedstocks, making
        them among the lowest cost producers in the industry.
     -- Expanded diversification into products that use ethylene as a feedstock
        with the addition of the EO/EG businesses. Nearly 60% of ethylene oxide
        is used to make ethylene glycol, which goes into PET fibers, film and
        bottles and antifreeze.
     -- A significantly improved Gulf Coast olefin distribution system with the
        combination of complementary pipeline assets that already support
        Equistar facilities and span from Corpus Christi to Lake Charles.
     Two new officer positions will be created at Equistar.  Brian Gittings of
 Occidental will be Vice President, Oxygenated Chemicals, and Clifton B.
 Currin, Jr. of Lyondell will become Vice President, Supply and Optimization.
 All other Equistar officer positions remain the same.  The Equistar governance
 committee will be expanded from six to nine members, with three
 representatives from each of the partner organizations.  Joining Dan F. Smith
 of Lyondell and William M. Landuyt of Millennium as a co-chair will be Dale R.
 Laurance, President of Occidental Petroleum.
     Lyondell Petrochemical Company is a major chemical and refining company,
 with majority ownership positions in the premier olefins, polymers and
 refining companies in North America.  Lyondell is:
     -- The largest producer of ethylene, propylene and polyethylene in North
        America and a leading producer of high value-added specialty polymers,
        color concentrates and polymeric powder through its interest in
        Equistar Chemicals, LP.
     -- One of the largest and most profitable refiners in the United States,
        processing very heavy Venezuelan crude oil to produce gasoline, low
        sulfur diesel and jet fuel, through its 58.5% interest in LYONDELL-
        CITGO Refining Company Ltd.
     -- The third-largest methanol producer in the U.S., through its 75%
        interest in Lyondell Methanol Company LP.
     Millennium Chemicals Inc. is a major international chemical company, with
 leading market positions in a broad range of commodity, industrial,
 performance and specialty chemicals.
 Millennium Chemicals Inc. is:
     -- The second-largest producer of TiO2 in the world and a leading producer
        of titanium tetrachloride;
     -- The second-largest producer of acetic acid and vinyl acetate monomer in
        the United States;
     -- A leading producer of fragrance and flavor chemicals and other
        products, including cadmium/selenium pigments and silica gel; and
     -- Through its partnership interest in Equistar Chemicals LP, a partner in
        the largest producer of ethylene, propylene and polyethylene in North
        America and a leading producer of high value-added specialty polymers,
        color concentrates and polymeric powders.
     Occidental Petroleum Corporation has operations in two main businesses:
 oil and gas and chemicals.  In oil and gas, Occidental has ongoing production
 and exploration in 19 countries, including the United States.  Occidental's
 OxyChem subsidiary is one of the world's largest commodity chemical producers,
 with interests in chlorovinyls, specialty businesses and petrochemicals.
 OxyChem is:
     -- The largest merchant marketer of chlorine and the third-largest
        producer of PVC resins in the United States.
     -- The world's largest producer of potassium hydroxide, chlorinated
        isocyanurate products and resorcinol.
     -- The world's largest marketer of EDC.
     -- The number one U.S. producer of chrome chemicals, phenolic molding
        compounds, antimony oxide and mercaptan warning agents.
     -- The number two U.S. producer of VCM and sodium silicates.
     -- The number three U.S. producer of ethylene oxide and ethylene glycol.
     The statements in this release relating to matters that are not historical
 facts are forward-looking statements that involve risks and uncertainties,
 including, but not limited to, future global economic conditions, production
 capacity, competitive products and prices and other risks and uncertainties
 detailed in the Securities and Exchange Commission filings of Lyondell,
 Millennium Chemicals and Occidental Petroleum.
        New additions with Occidental transaction are shown in all caps
     Location                Principal products               Annual capacity
     Channelview, Texas               Ethylene             3.8 billion pounds
                                     Propylene             2.7 billion pounds
                                     Butadiene             615 million pounds
                                       Benzene              90 million gallons
                                       Toluene              40 million gallons
                       Dicyclopentadiene (DCPD)             80 million pounds
                                      Isoprene             108 million pounds
                                     Resin oil             120 million pounds
                                   Piperylenes             100 million pounds
                                      Alkylate          19,000 barrels per day
                                          MTBE          13,000 barrels per day
                                 High -density
     Chocolate Bayou, Texas       polyethylene             400 million pounds
                                     PROPYLENE             725 MILLION POUNDS
                                     BUTADIENE             150 MILLION POUNDS
                                       BENZENE             105 MILLION GALLONS
                                       TOLUENE              26 MILLION GALLONS
                                          MTBE           2,300 BARRELS/DAY
     Clinton, Iowa                    Ethylene             960 million pounds
                                     Propylene             150 million pounds
                      Low-density polyethylene             430 million pounds
                     High-density polyethylene             450 million pounds
                                     PROPYLENE             664 MILLION POUNDS
                                     BUTADIENE             195 MILLION POUNDS
                                       BENZENE              79 MILLION GALLONS
     Crockett, Texas    Wire & cable compounds,
                            color and additive
     Fairport Harbor, Ohio        Wire & cable
                            color concentrates
     Heath, Ohio      Color, additive and foam
                     concentrates, performance
                                     PROPYLENE            200 MILLION POUNDS
     La Porte, Texas                  Ethylene           1.74 billion pounds
                                     Propylene            360 million pounds
                      Low-density polyethylene            395 million pounds
               Linear-low density polyethylene            480 million pounds
                     High-density polyethylene            545 million pounds
     Matagorda County, Texas
                     High-density polyethylene          1,050 million pounds
     Morris, Illinois                 Ethylene           1.13 billion pounds
                                     Propylene            280 million pounds
                      Low-density polyethylene            540 million pounds
               Linear low density polyethylene            650 million pounds
                                 Polypropylene            280 million pounds
     Pasadena, Texas
     (Bayport plant)             Polypropylene            400 million pounds
                      Low-density polyethylene            140 million pounds
                               ETHYLENE GLYCOL            675 MILLION POUNDS
                    ETHYLENE OXIDE DERIVATIVES            225 MILLION POUNDS
     Port Arthur, Texas
                      Low-density polyethylene            190 million pounds
                     High-density polyethylene            540 million pounds
     Tuscola, Illinois           Ethyl alcohol
                                 Diethyl ether
                    Compounds for wire & cable
                  Microfine polyolefin powders
     Victoria, Texas High-density polyethylene            450 million pounds
     Anaheim, California     Denatured alcohol
     Newark, New Jersey      Denatured alcohol
                                  Attachment 2
     Equistar Governance Committee
     Representing Lyondell Petrochemical Company:
     Dan F. Smith, President and CEO
     Jeffrey R. Pendergraft, Senior Vice President and Chief Administrative
     Third representative to be named
     Representing Millennium Chemicals Inc.:
     William M. Landuyt, Chairman and CEO
     John E. Lushefski, Senior Vice President and CFO
     George W. Robbins, President and CEO of Millennium Specialty Chemicals
     Representing Occidental Petroleum Corporation:
     Dale R. Laurance, President
     Stephen I. Chazen, Executive Vice President/Corporate Development
     Roger Hirl, President of Occidental Chemical Corporation
     Equistar Officers:
     Dan F. Smith, Chief Executive Officer
     Eugene R. Allspach, President and Chief Operating Officer
     Joseph M. Putz, Senior Vice President, Finance and Administration
     Debra L. Starnes, Senior Vice President, Polymers
     Michael Baldwin, Vice President, Responsible CareO
     John R. Beard, Vice President, Manufacturing
     Clifton B. Currin, Jr., Vice President, Supply and Optimization
     J.R. Fontenot, Vice President, Engineering
     Brian Gittings, Vice President, Oxygenated Chemicals
     Alan Houlton, Vice President, Customer Supply Chain
     Gerald A. O'Brien, Vice President, Legal & Secretary
     Myra J. Perkinson, Vice President, Human Resources
     W. Norman Phillips, Jr., Vice President, Petrochemicals
     Kerry F. Williams, Vice President, Research and Development
     Jeffrey L. Hemmer, Director, Business Process Improvement

SOURCE Lyondell Petrochemical Company