MORE CUTS, RESTRUCTURING SWEEP U.S. INDUSTRY

Restructuring, consolidating, and streamlining moves continue to spread across the U.S. petroleum industry.

Among recent developments:

• Oryx Energy Co., plans a further restructuring that together with earlier cuts may reduce its work force by about 40%.

• Amoco Production Co. is moving its Denver exploration staff to Houston.

• Interprovincial Pipe Line Inc., Edmonton, Alta., is restructuring the U.S. pipeline business of Lakehead Pipe Line Co. Inc.

• Phibro Energy Inc., Greenwich, Conn., will relocate refining, marketing, and natural gas businesses to Houston.

• Nerco Inc. is restructuring the corporate staff and headquarter organizations of its subsidiaries, reducing staff in those areas by 15%.

• FWA Drilling Co. Inc., Wichita Falls, Tex., is closing operations in Oklahoma and West Virginia.

ORYX

Oryx will close regional offices in Houston and Oklahoma City and consolidate their functions in Dallas.

The action is part of a plan to reduce costs by about $100 million/year and raise about $400 million through asset sales (OGJ, Oct. 7, Newsletter).

The consolidation, Dallas staff reductions, and asset sales could result in a loss of 1,000 employees. Currently Oryx has about 2,500 employees in the U.S. and about 100 outside the U.S.

The cuts will initially occur among office personnel, but as assets are sold associated field personnel likely will go with the company purchasing the assets, Oryx said.

The company closed its Midland, Tex., regional office this summer (OGJ, July 29, p. 46) and sold its California assets, which resulted in the elimination of 40-50 employees. Oryx moved the Midland operations to Oklahoma City.

Also this summer, the company moved its business planning and environmental affairs staff to Oklahoma City and Houston from Dallas, a move announced earlier in the year (OGJ, Mar. 18, p. 53).

Oryx expects the regional consolidation in Dallas to be complete by the end of first quarter 1992.

AMOCO

Amoco will move its Denver exploration staff to Houston in an effort to consolidate the worldwide exploration group.

The move will affect 155 jobs in the Denver office. About 90 employees will be offered transfers to Houston and 65 exploration related jobs in Denver will be eliminated.

The company will retain about 850 employees in the Denver office working for three business units and support groups responsible for Amoco's crude oil and natural gas production in the western U.S.

Amoco Production's Houston office will have more than 3,600 employees when consolidation is complete, expected in early 1992.

PHIBRO

Phibro plans to relocate its refining, marketing, and natural gas businesses to Houston by next summer.

It is the last phase of a restructuring plan that began early this year with the reduction of Phibro Energy's Zug, Switzerland, operation, consolidation of European trading activity in London, and staff downsizing at its Greenwich headquarters.

The moved businesses will be conducted under the name of Phibro Energy U.S.A. Inc. It will be responsible for all refining and product marketing, natural gas trading, liquefied petroleum gas trading, shipping, coal and coke, countertrade, and fertilizer businesses.

Corporate staff will remain in Connecticut at Phibro's new world headquarters in Westport, as of May 1992.

LAKEHEAD

Interprovincial has approved in principal restructuring and refinancing the U.S. pipeline business of its Lakehead Pipe Line Co. Inc. subsidiary.

Under the new structure, Lakehead will transfer its U.S. pipeline business to a master limited partnership. Interprovincial will operate as general partner and retain a 20% interest in the partnership, while offering the remaining interest to the U.S. public in an underwritten public offering.

The move will generate about $580 million to Interprovincial and is expected to be complete by yearend.

Lakehead's U.S. system extends 1,750 miles from the Canadian-U.S. border near Neche, N.D., to the border near Sarnia, Ont., and currently accounts for about half of Interprovincial's earnings.

NERCO

Nerco will restructure corporate staff and headquarter organizations of Nerco Coal Corp., Nerco Oil & Gas Inc., and Nerco Minerals Co. to reduce costs and improve efficiency. A total of about 60 employees in St. Louis, Vancouver, Wash., and Portland, Ore. will be affected.

The move will combine the four corporate headquarter groups in Portland, and certain functions within the companies will be reorganized to eliminate duplication.

FWA

FWA Drilling is restructuring its corporate functions, including closing offices in Oklahoma and West Virginia and streamlining its Texas operation.

The move includes reducing its fleet of land rigs to 26 from 39. A total of 16 permanent employees will be terminated.

FWA, now operating strictly in Texas, will remain headquartered in Wichita Falls with district offices in Midland and Tyler, Tex.

The company's Victoria, Tex., district office has been closed, and all South Texas operations will be handled out of Midland.

Following sale of its surplus rigs, FWA will operate 18 rigs out of Midland and eight out of Tyler. Four rigs currently based in Oklahoma will be moved to Texas.

Copyright 1991 Oil & Gas Journal. All Rights Reserved.