LOS ANGELES - Jan. 25, 1999 (PRIMEZONE) -- Occidental Petroleum Corporation (NYSE: OXY) said today that it has reduced its 1999 capital spending budget to $350 million compared to $1.06 billion in 1998.
Occidental also said that even with the reduced capital spending it expects 1999 oil and gas production to remain at approximately the same level as 1998, when it produced approximately 320,000 net barrels of oil and 703 million net cubic feet of natural gas per day.
Occidental said the company is on schedule to achieve $200 million in annual savings within two years by reducing selling, general and administrative costs. The $200 million target, announced last November, includes the elimination of more than 1,000 jobs and represents approximately a 30 percent reduction in overhead costs.
In addition to the announced savings, the company said other cost reduction initiatives were being developed to save an additional $100 million per year in costs.
Dr. Ray R. Irani, the company's chairman and chief executive officer, said, "Prudent planning dictates that we reduce spending during this period of low oil and chemical prices. The fact that we can sustain our oil and gas production despite reduced capital spending is evidence of the success of our strategy in recent years of focusing our resources on large high quality core assets such as Elk Hills and Qatar.
"As a result of our reduced spending for capital and overhead, we expect to maintain our dividend at its current level," Dr. Irani said.
Of the $350 million in 1999 capital, approximately $275 million will go to oil and gas -- with Elk Hills and Qatar receiving highest priority -- and the remainder to chemicals.
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