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SACRAMENTO — Oil giant BP-ARCO has agreed to pay $45.8 million to settle alleged widespread underground gasoline storage tank violations, including the nation’s largest cash penalty in the enforcement of tank regulations, state Attorney General Bill Lockyer said Wednesday. 

The settlement concludes a two-year investigation that found BP-owned Atlantic Richfield Co. failed to make required safety improvements at 59 service stations from Sacramento and Marysville south to San Diego, Lockyer said. 

The company falsely certified that its underground fuel tanks and pipes had been leak-proofed, he alleged, although BP spokeswoman Cheryl Burnett said company officials acted in good faith. ARCO, the state’s largest gasoline supplier, merged with London-based BP Amoco in April 2000. 

ARCO is paying $25 million in direct civil penalties and to cover investigation and enforcement costs, and $20.8 million for improvements to its tanks. 

It also agreed to monitoring and inspection of its 1,178 ARCO stations in California. Any station found in violation will closed immediately until improvements are completed, but Lockyer said he believes all have now been upgraded. 

“Every single one of our sites in California is now beyond compliance,” with double-walled tanks and pipes, Burnett said. “We’re looking forward to putting this behind us.” 

The settlement was filed Wednesday in San Francisco Superior Court, and also settles allegations that the company violated San Francisco certification requirements. It does not settle allegations involving actual leaking gasoline that are pending in Orange County and elsewhere. 

Lockyer alleged the company ignored requirements or misrepresented that upgrades had been completed while ARCO kept selling gas at the 59 stations, taking advantage of a law that allowed companies to self-certify that they were in compliance. 

That gave ARCO an unfair business advantage by postponing closures and upgrade costs, and hiring contractors after the rush by other companies to meet the deadline, he said. 

Burnett said more than 100 agencies oversee the tanks in California, leading to differences in interpreting regulations that resulted in some of the allegations. 

ARCO spent more than $100 million since 1985 upgrading its tanks in California, she said. Gas stations had 10 years to meet a Dec. 22, 1998, deadline to upgrade their tanks. The company temporarily shut down 72 stations until repairs were made, Burnett said.