Alaska Escapes Worst

Alaska largely spared in ARCO’s $500 million, two-year cost savings plan; Bowlin says can’t afford to cut costs in state

Kay Cashman

PNA Editor-in-Chief/Land & Leasing Reporter

Atlantic Richfield Co. will cut costs by $500 million over the next two years, ARCO said Oct. 16, a month after it announced it would be making worldwide budget reductions due to low oil prices. The price of oil is approximately 32 percent below its price a year ago.

The bad news is, the cost cuts will include the elimination of 900 jobs from the company’s work force of 20,000 people. The good news is, Alaska will be largely spared from the work force reductions, which are “principally in the L.A. area and Plano, Texas,” ARCO spokesman Lee Tashjian told PNA.

ARCO Alaska Inc.’s only cost cut to date was a tentative announcement Sept. 16 that a 10 percent drop in spending levels from $550 million in 1998 to $500 million for 1999 was likely. Spending levels for Alaska in 1999 have since been restored to $550 million, ARCO Alaska spokesman Ronnie Chappell told PNA Oct. 15.

“We will be doing some restructuring of our operations here in Alaska,” said Chappell, “ and some jobs will be eliminated.” But because ARCO Alaska has kept its per barrel operating costs flat, it won’t be seeing the same kinds of cuts that other ARCO operations are seeing, he said. ...

The rest of this story is available from Petroleum News • Alaska by calling the circulation manager Dan Wilcox at 522-9469 for back issue copies. (Oct. 1998)