Tumbling oil prices Tuesday prompted Atlantic Richfield to temporarily suspend a program to buy back $4 billion of its own stock launched last year as part of a vast restructuring of the Los Angeles-based company that eliminated 6,000 jobs.
Separately, Arco said a new round of 2,000 layoffs will have little effect in California.
An Arco spokesman said the company will stop buying its own stock while it decides what would be a "prudent use" of company resources.
"We've stepped back temporarily to see what will happen to crude oil prices, and then we will decide what our next step will be," he said.
Halting the repurchase plan in no way indicates that Arco doesn't consider its stock a good buy, the spokesman said. "We have the utmost faith in the integrity and the future of this company," he said.
Spent $3.4 Billion on Stock
Arco has finished 85% of its original stock repurchase plan, spending about $3.4 billion on nearly 55 million shares, the spokesman said. Arco has 181.5 million common shares outstanding.
The sharp decline in crude oil prices that began in recent weeks also is behind Arco's second restructuring in less than a year. Last April, Arco revealed plans to withdraw from the petroleum refining and marketing businesses east of the Mississippi River and to sell all of its remaining non-coal minerals operations. The resulting layoffs left Arco with 29,000 employees, including about 8,000 in California.
In a much smaller reorganization announced Monday, Arco will consolidate its Arco Oil & Gas Co. and Arco Exploration & Technology Co. subsidiaries into one operation, called Arco Oil & Gas. The consolidation is designed to improve the efficiency of Arco's oil- and gas-producing properties in the Lower 48 states.
In addition, Arco said it will sell several hundred "small and geographically remote" properties in the Lower 48 states.
The latest consolidation "is in keeping with the spirit of the restructuring announced last year in that we are examining what's happening in the market and responding to become more efficient and make this company better able to withstand any more (declines) in crude oil prices," Arco's spokesman said.
Many of the properties slated for sale are in the mid-continent and Rocky Mountain regions, the spokesman said. Some small properties in California's San Joaquin Valley are among those up for sale, he said.
Arco will keep slightly fewer than 300 properties in the Lower 48 states, but those properties represent more than 90% of Arco's production in the region, the spokesman said. Arco produced about 200,000 barrels a day of crude oil in the Lower 48 states during 1985.
As a result of the two moves, up to 2,000 jobs will be eliminated, the spokesman said.
About 1,000 of the layoffs will occur in the Dallas area, he said.
Arco plans to close a district office in Denver that employs about 300 people, but about half of those employees are expected to transfer to Arco's Midland, Tex., office. Other jobs will be eliminated as properties are sold, the spokesman said.
"It has a very minimal impact on our California operation," the spokesman said.
Arco estimated that the one-time cost of the consolidation would be approximately offset in 1986 by anticipated cost savings and any gains from the property sales.