Arco Indonesia to Cut 1,000 Jobs to Slash Costs (Update1)
1/26/99 2:2
Arco Indonesia to Cut 1,000 Jobs to Slash Costs (Update1)
(Adds more on Arco's business in Indonesia, oil price,
share price)
Jakarta, Jan. 26 (Bloomberg) -- Atlantic Richfield
Indonesia plans to slash about 1,000 jobs to cut costs in the
wake of the slump in oil prices, said Satia, the company's
public relations officer.
The company has about 1,780 workers at present, and wants
to cut that number to about 850. Arco will offer the workers
voluntary redundancies with compensation, another official
said.
Brent crude, which fell as much as 25 cents, or 2.3
percent, to $10.85 per barrel in London yesterday, fell as low
as $9.55 per barrel on Dec. 21.
Arco's plan still needs to be approved by state oil and
gas company Pertamina, with whom it has a production sharing
agreement. So far the company hasn't made any official
statements while awaiting that approval, the official said.
Besides oil fields, Arco Indonesia's main asset is the
Tangguh gas field, which was discovered in 1994 in the
easternmost province of Irian Jaya. The field holds 18
trillion cubic feet of gas, equal to about 11 percent of U.S.
reserves. Arco's partners in the Tangguh project include
Pertamina, Japan's Kanematsu Corp. and Nippon Oil Co., and the
U.K.'s BG Plc.
Parent company Atlantic Richfield Co. is the seventh-
largest U.S. oil company.
It warned in September it would fire employees and cut
overheads, operations and investments to ride out a prolonged
period of low oil prices and avoid being taken over.
``We must take action to ensure that Arco remains a
strong and successful independent company. Regrettably, it
will be necessary to carry out reductions in our workforce,''
Arco Chairman Mike Bowlin wrote in an e-mail message to
employees at the time.
``In response to low energy prices and other competitive
pressures, consolidation is occurring within our industry at
an accelerated pace.''
Though oil companies have been paring payrolls for years
and job cuts have been hurting firms that provide services to
oil companies, major oil companies so far have shied away from
acknowledging job cuts were inevitable because of low oil
prices.
Arco shares fell 1 1/16 to $58 15/16 Monday.
--Alistair Hammond in Jakarta (62-2) 352-2964 with reporting
by George Stein in Los Angeles (609) 279-4031/pl
Story illustration: To graph Arco shares, type ARC US <Equity>
GP <Go>.
TOP NRG <Go> for top energy stories.
Industry news:
NI GAS Natural gas
OIL Oil
NI NRG Energy
Regional news: News by category:
NI INDO Indonesia NI FIELD Oil, gas fields
NI US U.S. NI COS Company news
NI CA California
NI UK U.K.
Story illustration: To graph Arco shares, type ARC US <Equity>
GPO.
TOP NRG <Go> for top energy stories.
Company news: Industry news:
ARC US <Equity> CN Arco NI OIL Oil
PERT IJ <Equity> CN Pertamina NI CHM Chemicals
8020 JP <Equity> CN Kanematsu NI NRG Energy
BG/ LN <Equity> CN BG NI GAS Gas
5001 JP <Equity> CN Nippon Oil
Category news: Regional news:
NI COS Companies NI US U.S.
NI CST Construction & engineering NI INDO Indonesia
NI VNT Joint ventures NI CA California
NI ORDER Contracts, orders NI UK U.K.
NI ASIA Asia
NI ASIAX Asia, ex
Japan, Australia and New Zealand
People in the news:
WHO SATIA
For more on Indonesia's oil industry, type TNI INDO OIL
-0- (BN ) Jan/26/1999 2:02
______________________________________________________________________
To subscribe, email: [EMAIL PROTECTED]
To unsubscribe, e-mail: [EMAIL PROTECTED]
Indonesia Baru: berkeadilan tanpa kekerasan!
