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OCCIDENTAL ANNOUNCES REDUCTIONS IN CAPITAL EXPENDITURES, OPERATING COSTS TO SAVE $300 MILLION IN 1993

 LOS ANGELES, Nov. 19 ~PRNewswire~ -- Occidental Petroleum Corp. (NYSE: OXY), today announced that it will generate savings in 1993 of at least $300 million through reductions in capital expenditures and operating costs, including an across-the-board hiring freeze and a targeted salary freeze.
 "We must continue to operate on the assumption that our performance in the near term could very well remain under the influence of a sluggish economy," Dr. Ray R. Irani, Occidental's chairman, president and chief executive officer, told a meeting of security analysts in New York.
 The salary freeze is effective immediately and will remain in place through 1993 for all salaried employees earning more than $40,000 a year.
 Salaried employees who earn less than $40,000 will receive a 3 percent increase next April 1 to offset inflation. Hourly workers are not affected by this action.
 Annual savings from the salary freeze, as well as some changes in employee benefits, are expected to be about $55 million.
 In addition, savings of about $100 million are expected from targeted cost reductions, including companywide workforce reductions of about 500 positions by the end of 1993.
 Capital expenditures will be reduced by about $150 million, to $750 million in 1993 vs. a budgeted $900 million in 1992.
 "We have already begun to scale back capital expenditures in all areas except our primary growth business -- international oil and gas," Irani said. "In fact, the international oil and gas budget will be increased by $75 million next year, or about 30 percent above the 1992 level. Capital spending in other areas will be increased when the economy improves and investment opportunities develop."
 The net effect to date of Occidental's restructuring which began in January 1991 has been an incremental improvement of approximately $350 million in the company's net income.
 "However, the benefits of restructuring have been temporarily negated by the recession," Irani said. "A combination of lower volumes and prices, and correspondingly reduced profit margins, has lowered the results from our corebusinesses."
 In discussing the outlook of Occidental's operations, Irani said that international oil and gas will fuel Occidental's future growth and profitability and that chemicals is positioned to rebound dramatically when the economy strengthens.
 Net production of Occidental's international oil and gas operation will increase by more than 50 percent to nearly 210,000 barrels per day over the next two years as a result of discoveries in Ecuador and Yemen coming on stream and because of an enhanced oil recovery project in Russia. In addition, Occidental has exploration activities under way in 16 countries encompassing 47 million acres and expects to drill 45 to 50 exploratory wells in 1993.
 "Many of these countries have opportunities that could significantly increase Occidental's oil and gas reserves in the future," Irani said.
 A recent discovery offshore the Philippines could contain between 300 million and 500 million barrels of oil, and a recent appraisal well offshore Malaysia confirmed that Occidental's Jintan discovery has about 4 trillion cubic feet of natural gas and 75 million barrels of condensate in place. Occidental has 50 percent and 37.5 percent interests in these projects, respectively. Occidental also is discussing enhanced oil recovery projects with Algeria and several other parties.
 Irani said that Occidental's natural gas transmission business, MidCon Corp., will generate approximately $650 million in operating cash flow and will report earnings of more than $300 million this year.
 MidCon's comparative performance with respect to return on assets, operating income, sales, storage volumes and throughput "will be strong again this year and in 1993," he said.
 Irani noted that OxyChem's highly cyclical commodity businesses "are currently out of favor because they are at the bottom of the cycle." But he added, "Our chemical operations have tremendous upside potential in a healthy economy."
 -0- 11~19~92
 ~CONTACT: Howard Collins (media), 310-443-6523 or Kenneth J. Huffman (investors), 212-603-8183, both of Occidental Petroleum~
 (OXY)


CO: Occidental Petroleum Corp. ST: California IN: OIL SU:

EH -- LA012 -- 2751 11~19~92 10:01 EST
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Publication:PR Newswire
Date:Nov 19, 1992
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