Kerr-McGee Corp. yesterday joined a growing number of companies,including ARCO, Unocal and Occidental Petroleum, that plan torestructure or reduce workforces because of the depressed oilmarket. Kerr-McGee said it plans to layoff about 70 workers,reducing its Oklahoma City metropolitan area workforce by 7% andits exploration and production company staff by a similar amount.The company, which has $3.7 billion in assets and had already shedits coal businesses this year, said the restructuring is designedto save 20% of annual overhead cost, or about $18 million.

“We continuously review our businesses to ensure the efficiencyof the company,” said CEO Luke R. Corbett. “The recent divestitureof Kerr-McGee Coal Corp. further emphasized the need to re-examinework processes.”

Following a report last week that Atlantic Richfield Co. plansto reduce the size of its workforce and slash its operating budgetbecause of slumping oil prices, two top executives, PresidentWilliam E. Wade and Executive Vice President Anthony G. Fernandes,announced their retirement yesterday.

The loss triggered a shift in the ARCO executive team. MichaelE. Wiley, executive vice president, will become president andassume the newly created position of COO, and Donald R. Voelte,senior vice president, corporate planning, will become executivevice president. Wade was credited for his leadership innegotiations with ARCO’s partners in Prudhoe Bay that materiallyincreased the value of the company’s Alaskan assets. He also wasinstrumental in opening the door to negotiations that resulted inARCO’s recent acquisition of Union Texas Petroleum, a move thatstrengthened ARCO’s global position. Fernandes helped build ARCO’scompetitive position in China and led the divestiture of thecompany’s coal and chemicals businesses.

Occidental Petroleum’s Bakersfield, CA-based drilling divisionannounced last week it was shaving about 80 positions and another130 jobs may be lost in other OXY divisions as part of its majorrestructuring forced by low world oil prices and pressure fromcompetitors.

Unocal Corp. share prices suffered a slight setback yesterdayafter the company warned investors its third quarter earnings werelikely to be at the low end of Wall Street expectations because oflow oil prices, Gulf of Mexico storms and hurricanes and the costof a greater number of dry-holes during the quarter. Unocal shareprices fell $0.44/share (1.19%) to close the day at $36.31/share.

“We are confident that we will have positive earnings for thequarter, but extreme price volatility and timing of dry holes makeit difficult to project an exact number,” CEO Roger C. Beach saidon Tuesday. “While we cannot control prices, we continue toaggressively lower costs to help mitigate the impact on earnings.”

Unocal had recorded adjusted earnings of 26 cents per share inthe second quarter. The latest First Call Corporate Monitor analystestimates for the third quarter ranged from 10 to 25 cents pershare, with a consensus of 20 cents. Unocal said it expects thirdquarter adjusted earnings will be below 10 cents per share,excluding special items. In last year’s third quarter, Unocalreported net earnings of $177 million, or 71 cents a share.

Spirit Energy 76’s estimated average gas price realization was$1.58/Mcf for September, and about $1.98 for the third quarter, 8%below the second quarter. At the same time, Unocal’s explorationsubsidiary in lower-48 states expects exploration expenses in thethird quarter to be 70% above the second quarter level. Inaddition, the recent storms have had a significant impact onUnocal’s production in the Gulf of Mexico.

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