WHITE PLAINS, N.Y. -- Texaco Inc., faced with continuing low oil prices, said yesterday that it will cut 1,000 oil-exploration jobs as part of an effort to save $200 million in annual costs.
The third-biggest U.S. oil company said the job cuts, equal to about 5 percent of its total work force, will be completed by March. Texaco will shed 750 U.S. jobs and 250 abroad, primarily in Britain, said Chris Gidez, company spokesman. Texaco also said it will reorganize its oil-exploration division effective Jan. 1.
Forecasts are that oil prices will remain low next year. If so, the cuts may not be enough for a company that had revenue of RTC $45.19 billion last year.
"It's a drop in the bucket," said Fadel Gheit, an analyst at Fahnestock & Co. in New York, who has a "hold" rating on Texaco shares. "If it's the first step and there will be more, then we can sit up and take notice."
Texaco said earlier this week it will spend $3.6 billion to $3.7 billion this year on capital projects such as oil exploration, 20 percent less than the $4.6 billion budgeted. The company said its 1999 budget, while not yet completed, will total less than $4.6 billion.
Mobil Corp., the second-biggest U.S. oil company and Unocal Corp., the 15th-largest, said Wednesday that they would cut expenses because oil prices are lingering at the lowest levels in 12 years.
Unocal said it would save $800 million by cutting back spending on oil exploration and reducing costs. Mobil said it would cut $500 million in costs. Both said jobs would be cut, but didn't say how many.
Texaco has 8,000 employees and contractors in its oil-exploration division. It has about 20,000 total employees, Gidez said.
The cuts announced this week, which include project deferrals, "obviously will have an impact on production down the road," Gidez said, without being more specific.
Texaco projects 1998 petroleum production to be higher than last year, when the company produced 833,000 barrels of oil a day and 2.18 billion cubic feet of natural gas, Gidez said. Texaco shares rose $1.625 to $59.9375 on the New York Stock Exchange yesterday.
Pub Date: 11/13/98