SC 14D9/A

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                     SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549
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                               SCHEDULE 14D-9
                   SOLICITATION/RECOMMENDATION STATEMENT
                    PURSUANT TO SECTION 14(d)(4) OF THE
                      SECURITIES EXCHANGE ACT OF 1934
                             (AMENDMENT NO. 3)
                          ------------------------


                           ARCO CHEMICAL COMPANY
                         (NAME OF SUBJECT COMPANY)

                           ARCO CHEMICAL COMPANY
                    (NAME OF PERSON(S) FILING STATEMENT)
                          ------------------------


                  COMMON SHARES, PAR VALUE $1.00 PER SHARE
                       (TITLE OF CLASS OF SECURITIES)

                                001920 10 7
                     (CUSIP NUMBER OF CLASS SECURITIES)
                          ------------------------

                         Robert J. Millstone, Esq.
                     Vice President and General Counsel
                           ARCO Chemical Company
                           3801 West Chester Pike
                     Newtown Square, Pennsylvania 19073
                               (610) 359-2000



 (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES
      AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)


          This Amendment No. 3 amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9 filed by ARCO
Chemical Company, a Delaware corporation (the "Company"), on June 25, 1998
(and amended by filings made on July 1, 1998 and July 6, 1998) (as
previously amended, the "Schedule 14D-9") in connection with the offer (the
"Offer") by Lyondell Acquisition Corporation, a Delaware corporation
("Purchaser") and a wholly-owned subsidiary of Lyondell Petrochemical
Corporation, a Delaware corporation ("Lyondell"), to purchase for cash all
of the outstanding shares of Common Stock, par value $1.00 per share, of
the Company. The Offer was made pursuant to the terms of an Agreement and
Plan of Merger, dated as of June 18, 1998, between the Company, Lyondell
and Purchaser. All capitalized terms used but not defined herein shall have
the meanings set forth with respect to such terms in the Schedule 14D-9.

Item 4    THE SOLICITATION OR RECOMMENDATION

          The following sentence should be added to "Background," as the
last sentence of the paragraph immediately prior to the paragraph beginning
"On May 15, 1998," (p. 19):

          In light of the bid process conducted by ARCO and Salomon Smith
     Barney, the Company did not separately solicit potential bidders for
     the sale of the Company.

          Factors (a), (b), (e), (i) and (j) of the "Reasons for the
Recommendation of the Board of Directors" are hereby amended to read in
their entirety as follows:

          (a) the industry in which the Company operates and the financial
     condition and historical results of operations and cash flows of the
     Company, including the Board's general familiarity with the
     considerations summarized under the captions "RISK FACTORS--Industry
     Cyclicality and Overcapacity; Intense Competition; Raw Material Prices
     and Availability; MTBE Legislative Risks; Operating Hazards;
     Environmental Considerations; and Foreign Operations, Country Risks
     and Exchange Rate Fluctuations" of the prospectus included in the
     Registration Statement on Form S-3 filed by the Company with the
     Commission on June 3, 1998 (the "Prospectus") (such information being
     incorporated herein by reference);

          (b) the strategic plans of the Company and the prospects of the
     Company as an independent entity, taking into account the
     considerations referred to in clause (a) above, general economic
     uncertainties (including in Asia), the risk that the Company might not
     achieve its forecasted results of operations and uncertainties
     regarding the valuation that would be accorded the Shares in the
     equity markets over the ensuing years;

          (e) possible alternatives to the Offer and the Merger, including,
     without limitation, the Public Offering/Repurchase Transaction that
     had been the subject of discussion or action during the preceding
     months. The Public Offering/Repurchase Transaction contemplated that,
     simultaneously with a secondary offering by ARCO of approximately 24
     million Shares, the Company would repurchase from ARCO, at the
     offering price, up to $850 million of additional Shares to the extent
     necessary to reduce ARCO's interest in the Company to 50%. The Public
     Offering/Repurchase Transaction was approved by a Special Committee of
     the Board and the Board after considering a variety of factors
     including the increased leverage that would be incurred to finance the
     transaction, the expanded public float that would result from ARCO's
     secondary offering and other factors which are described under the
     captions "RISK FACTORS--Significant Increase in Leverage; Potential
     Impact on Capital Expenditures and Dividends; and Tax Treatment of
     Dividends" and "SELLING STOCKHOLDER; STOCK REPURCHASE" in the
     Prospectus (such information being incorporated herein by reference).
     The Board was also cognizant that management had proposed and ARCO had
     rejected a leveraged recapitalization involving a self tender offer
     for all of the Shares held by the Company's public stockholders, the
     repurchase of a portion of the Shares held by ARCO and an equity
     investment by an institutional investor; and that ARCO had determined
     it did not wish to continue on as a greater than 50% owner of the
     Company;

          (i) ARCO's view, reflected in a letter (set forth as an Exhibit
     hereto and incorporated herein by reference), dated June 17, 1998,
     from Mike R. Bowlin, Chairman and Chief Executive Officer of ARCO, to
     the Board of Directors, that the achievement of the Company's recent
     long-range plan is subject to significant risks and uncertainties and,
     given such risks and uncertainties and the added uncertainties in the
     equity markets, the Offer will allow stockholders to achieve greater
     value; ARCO's determination in light of the foregoing that a sale of
     the Company on the proposed terms is in the best interests of all of
     the Company's stockholders; its expressed desire and recommendation
     that the Board of Directors approve the Merger Agreement; and its
     commitment under the Tender and Voting Agreement to tender its Shares
     pursuant to the Offer;

          (j) the financial and other terms and conditions of the Offer,
     including the all-cash nature of the consideration being offered and
     the likelihood of the waiting period under the HSR Act expiring or
     being terminated without a request for further information from
     antitrust regulators, and the likelihood that the consummation of the
     Offer would occur as promptly after the execution of the Merger
     Agreement as permitted by the federal securities laws;

          The penultimate paragraph of "Reasons for the Recommendation of
the Board of Directors" is hereby amended to read in its entirety as
follows:

          The Board's decision was based on the totality of information
     considered by it. The Board of Directors did not assign relative
     weights to the factors considered by it, determine that any one factor
     was of primary importance or identify the individual factors that
     supported its decision or those that failed to support its decision.

Item 9.   MATERIALS TO BE FILED AS EXHIBITS

     49. Letter, dated June 17, 1998, from Mike R. Bowlin, Chairman and
     Chief Executive Officer of ARCO, to the Board of Directors of the
     Company incorporated herein by reference.

     50. "RISK FACTORS--Industry Cyclicality and Overcapacity; Intense
     Competition; Raw Material Prices and Availability; MTBE Legislative
     Risks; Operating Hazards; Environmental Considerations; and Foreign
     Operations, Country Risks and Exchange and Exchange Rate Fluctuations"
     and "SELLING STOCKHOLDER; STOCK REPURCHASE" in the Registration
     Statement on Form S-3 filed by the Company with the Commission on June
     3, 1998 and incorporated herein by reference.


                                 SIGNATURE

          After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.

                                          By:   /s/ Robert J. Millstone
                                             ------------------------------
                                          Name:  Robert J. Millstone
                                          Title: Vice President and
                                                   General Counsel

Dated: July 15, 1998

EX-99.49

                                                            EXHIBIT 99.49

                  [ATLANTIC RICHFIELD COMPANY LETTERHEAD]



June 17,1998


To the ARCO Chemical Company Board of Directors
ARCO Chemical Company
3801 West Chester Pike
Newtown Square, PA  19073-2387

Dear ARCO Chemical Company Directors:

ARCO will be presenting to your Board on Thursday, June 18, a transaction
in which Lyondell Petrochemical Company will make a tender offer for all of
ARCO Chemical Company's outstanding Common Stock.

I want you to know that ARCO is strongly in favor of this transaction. We
have carefully reviewed and reflected on ARCO Chemical Company's recent
long range plan. While it is a good plan, we believe that there are
significant risks and uncertainties in achieving the LRP. Given the risks
in the plan and the added uncertainties in the equity markets, I believe
that greater value will be realized by the shareholders in accepting the
Lyondell proposal.

This is not a reflection on ARCO Chemical management. They've done a very
good job. This is simply our view of how to achieve the highest shareholder
value.

We have greatly enjoyed our association with ARCO Chemical Company, its
directors, management and employees, and I thank you for your excellent
service.

Sincerely,



Mike R. Bowlin
Chairman and Chief Executive Officer