Chevron and Arco both said yesterday they will be chopping $500million from their costs for 1999. “To successfully weather thebusiness conditions of low crude oil, natural gas and commoditychemicals prices, we have to continue to find ways to minimize thecost of operating our business,” said Ken Derr, Chevron’s CEO.

Chevron reported a 39% drop in net income to $1.98 billion in1998 from $3.36 billion in 1997. Fourth quarter net income was down51% to $431 million. Chevron said it posted earnings of$0.58/share, which beat analysts’ predictions of $0.47.

Arco said Monday it plans to sell non-core operations such aschemical and coal assets in a two-year, $500 million cost-savingventure. “There is no question this has been a bad year for oils,”said Mike Bowlin, Arco CEO. Arco posted a net loss of $794 millionin 4Q98 after earning $382 million in 4Q97. For the year, Arco saidits net income dropped to $452 million from $1.77 billion in 1997.

Last week, Mobil said it would reduce capital spending in 1999by 11% to $4.8 billion. The company said it has prioritized somajor operations would continue to be funded. Mobil’s annualearnings are expected to be released on Wednesday.

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