Occidental cut its capital spending budget by 26%.

The Los Angeles-based oil producer said falling oil prices forced it to implement a contingency plan that will reduce its 1986 capital spending to $1.1 billion from a planned $1.5 billion. Chairman Armand Hammer said spending on oil and gas operations will drop to $750 million from $1 billion. The elimination of 700 jobs in late 1985 was a first step in the contingency plan, the firm said.