Cook to Stay on Past Retirement Age, Arco Says

In a bid to keep its widely respected management team intact during tough times in the energy industry, the directors of Atlantic Richfield Co. on Monday said Chairman and Chief Executive Lodwrick M. Cook has agreed to continue working for at least two years past normal retirement.

“We all felt it would be good to keep this particular skipper on this particular crew,” said John Gavin, former U.S. ambassador to Mexico and an Arco board member.

The news came as Los Angeles-based oil firm released earnings for the fourth quarter and for all of 1991 that showed a steep drop in net income, though not as steep as the slides at some other big energy companies.

Cook will turn 65 in June, 1993, and under company policy would have been expected to step aside then.

Yet staying on has a powerful precedent at the company. Cook’s predecessor, Robert O. Anderson, was Arco chairman for 20 years. During much of that time he also served as CEO and remained chairman for three years past retirement age.

Cook, a prominent figure in Los Angeles civic circles, has been known in the energy industry for taking bold, sometimes contrarian positions. For example, he has favored substantial taxes on gasoline to foster energy conservation--a stance at odds with the rest of the industry.

He also has been credited with leading Arco through six years of restructuring--which has included layoffs, sales of non-core subsidiaries and stock buybacks--that has gained Arco a reputation as one of the leanest of energy companies.

Cook said on Monday that he welcomed the opportunity to continue Arco’s efforts to expand its international operations, adding that his health remains good. No more staff cutbacks are expected, he said.

Some industry observers noted that the delayed retirement would allow Arco’s board more time to consider a successor from the ranks of upper management.

“It obviously has that effect,” Cook agreed. “We have some people in the wings to be considered over that time period, and some of those people have been in their job a fairly short time.”

Arco’s earnings dropped 53% in the fourth quarter, to $268 million from $566 million in 1990. Cook cited a “dramatic change in the operating environment” as the year progressed, including worldwide recession and continued low oil and natural gas prices.

Arco’s net income for the year fell as well--to $709 million in 1991 from a company record $2.01 billion in the heated market of 1990. The 1991 results reflect charges of $295 million from a restructuring that included personnel cuts, property sales and write-downs.

Two other major energy companies Monday released financial details of a dismal fourth quarter, and full year, in the oil patch.

Unocal Corp., also headquartered in Los Angeles, experienced a severe slide in earnings contrasted with the record profit of the last quarter of 1990. In the months before the allied invasion of Kuwait in January, 1991, fears of severe damage to Middle East oil fields inflated crude prices to an average of almost $30 a barrel.

Unocal lost $16 million in the quarter ended Dec. 31, contrasted with earnings of $38 million in the same period a year earlier.

The firm’s preliminary net earnings for the year dropped 82%, to $73 million from $401 million in 1990. The company took write-downs totaling $62 million on work begun but canceled on a new Los Angeles refinery hydrotreater and a west Sacramento fertilizer plant.

Unocal Chairman and CEO Richard J. Stegemeier blamed lower refining and marketing margins as well as low energy prices and the larger effects of the recession for the “disappointing” year.

Bartlesville, Okla.-based Phillips Petroleum Co. also saw earnings plummet in the final quarter, to $79 million from $237 million in 1990.

Phillips’ net income for the year fell 67%, from $779 million in 1990 to $258 million. C. J. Silas, chairman and chief executive, delivered the news with a gloomy observation: “We haven’t seen any upturn in the economy as far as our operations are concerned.”