Further Retrenchment Not Expected, Arco Says
Atlantic Richfield said Tuesday that it could withstand two or three years of today’s $14-a-barrel oil prices without making further retrenchments but does not think that that will be necessary.
Arco Chairman Lodwrick M. Cook told shareholders in Beverly Hills that the “equilibrium” price of crude oil is about $20 a barrel. Organization of Petroleum Exporting Countries officials, he said, have indicated that OPEC members may reach agreement this summer on price and production levels and that prices would be likely to rise as a result.
Arco was one of three oil companies to observe the annual-meeting season on Tuesday. Though the collapse in oil prices dominated shareholder concerns, Chevron had to defend its presence in Marxist-led Angola, Marathon Oil said it is preparing to abandon its operations in Libya, and Arco disclosed that it might sell part of its big art collection.
At the first Arco shareholder meeting in 20 years not presided over by now-retired Chairman Robert O. Anderson, Cook and President Robert E. Wycoff portrayed the company as strongly positioned because of its huge Alaskan oil and gas reserves and because it restructured just before oil prices collapsed last winter. In the last four years, Arco has cut employment to 30,000 from 50,000 and sold off millions of dollars worth of assets.
Detailing previously announced cutbacks in exploration, Cook and Wycoff said Arco will undertake safer, less costly exploration from now on, most of it in Alaska and overseas. And they said there will be renewed emphasis on selling oil as opposed to finding it.
“We want to leave a strong marketing imprint,” Cook said of his reign as chairman, which began Jan. 1, when Anderson retired.
One element of that is a de-emphasis of the company’s legal name, Atlantic Richfield, in favor of the more familiar Arco. Wycoff said the official name will remain unchanged but that most public references will be just to Arco.
In response to a shareholder who questioned whether Arco should maintain its noted art collection in such tough times, Cook said the company is studying “whether our present inventory is too large.” Under Anderson, Arco put together a multimillion-dollar collection of American regional art that is displayed in company office buildings.
In Houston on Tuesday, news agencies reported, U.S. Steel, parent of Marathon Oil, told shareholders that the company has not been able to find a buyer for its $68 million of assets in Libya and will probably have to abandon them. The White House has set a June 30 withdrawal deadline for U.S. oil firms operating in Libya, which has been accused of sponsoring terrorist activities.
David M. Roderick, chairman of U.S. Steel, said Marathon earned $33 million in Libya last year and expects to earn $21 million this year. The assets mainly consist of Marathon’s 16.3% share of oil in the ground owned by a government-controlled joint venture.
In Atlanta, Chevron was confronted with a Fidel Castro look-alike who arrived by helicopter at the hotel where shareholders were meeting. The impostor represented a political group called the Conservative Caucus, which is upset with Chevron because of its oil-related activities in Angola.
Chairman George M. Keller said Chevron’s presence in Angola--property that it took over when it bought Gulf Oil last year--does not constitute approval of the Luanda government. But the political group said Chevron’s activities generate revenue for Angola that it uses to buy Soviet weapons and to pay for the Cuban military presence in the country.