YOU ARE HERE: LAT HomeCollections

Arco Enters Brave New Era : President Mike R. Bowlin Takes Helm as New CEO


Entering an era of inevitable change, the board of Atlantic Richfield Co. voted Monday to promote Arco President and Chief Operating Officer Mike R. Bowlin, 51, to chief executive.

As of July 1, Bowlin will succeed Lodwrick M. Cook, 65, one of the most visible U.S. oil company executives, as CEO. Cook will remain chairman of the board for another year.

Bowlin--widely praised in the industry as a capable and personable executive--had been the heir apparent for some time.

He will lead Arco--an oil company more sensitive than most to the torments of low crude prices--into a world in which prices may stay low far into the future. At the same time, he will preside over the decline in the Alaskan production that has been the company's mainstay for years.

"He's very solid," said J. Robinson West, president and CEO of Petroleum Finance Co., a Washington, D.C., consulting firm. "He has broad experience. And Mike is very good with people. He's a good listener."

Roy A. Anderson, a former Lockheed Corp. chairman who served on Arco's board from 1986 to 1992, watched Bowlin's progress with the company.

"He's very believable, very credible," Anderson said, "and in a big company such as Arco, that's extremely important."

Bowlin, who joined Arco in 1969 as a personnel representative, faces as formidable a set of challenges as those that met Cook when he took over the nation's seventh-largest oil company in 1985.

While Arco's Alaskan production was heading toward its peak as Cook became CEO, oil prices--once expected to surpass $80 a barrel--surprised the world by careening to a low of $10.

Arco's board approved Bowlin's promotion as oil prices were falling again Monday--this time in response to failure by the Organization of Petroleum Exporting Countries to cut production and stabilize prices.

West Texas Intermediate, the benchmark U.S. crude, fell $1.14 Monday to $13.98 a barrel. And oil company stocks fell with it. Despite positive reaction to Arco's orderly succession, the company's shares closed at $98, down $3 on the New York Stock Exchange.

Several analysts noted that Bowlin has been a key executive--as vice president and then president of Arco International Oil and Gas Co.--in Arco's shift to new oil finds in the North Sea, Indonesia and, lately, offshore China. Disappointing test wells in Alaska last year are likely only to accelerate Arco's investments in overseas production, they say.

"Arco has operated in California (marketing and refining) very skillfully, but they're going to have to develop new income-generating assets in their portfolio," said West, of Petroleum Finance.

Bowlin confirmed Monday that beyond developing foreign oil, the company is actively looking at overseas refining and marketing, particularly in Asia. In addition, Arco is interested in providing coal--possibly from vast Chinese coal deposits--and natural gas for electric power production.

"This is a time to stop and think about our business," Bowlin said.


Tough financial times will probably reduce another highly visible Arco presence, Bowlin said--its corporate giving.

"We will always continue to have an interest in helping the communities in which we live and work. That is a longstanding tradition," Bowlin said. "But having said that, as our profits have declined, we have already begun a decline in our corporate contributions." Arco Foundation giving peaked at $36 million in 1983 and had fallen to $17 million last year.

Bowlin, described by many as more reserved than Cook, said Cook would likely continue for the next year as Arco's most prominent executive in community affairs. Cook was recently named chairman of Rebuild L.A., the private-sector group charged with revitalizing economically depressed parts of Los Angeles.

Meanwhile, Bowlin will concentrate on the company. And there is much to do.

Domestically, Arco is carrying out a painful restructuring of its Lower 48 gas and oil operations, the kind of belt-tightening that virtually all other U.S. oil companies have had to do. Announced last fall, Arco's latest pullback has cut 1,300 jobs and resulted in a $450-million charge in 1993's fourth quarter.

Some companies have moved faster, however.

"We saw other companies like Chevron and BP come out earlier and do this, and they had earlier results that were significant," notes Holly Gustafson, a Washington-based energy analyst with NatWest Securities Corp.

Bowlin concedes that Arco spent five years preparing to restructure its U.S. operations. "But I think we have it right now," he said.

Cook's Tour

Lodwrick M. Cook became CEO of Atlantic Richfield Co. in late 1985. His tenure has been marked by low oil prices and the spectre of expensive environmental regulation. Some key points in the Cook era:

1985-87: Completed a restructuring of the company. All refining and marketing assets in the eastern United States were sold, transforming Arco into an exclusively West Coast gasoline marketing company.

1987-present: Emphasized international activities focusing on oil, gas, coal and chemical development in countries such as China, Indonesia, the United Kingdom and Australia.

1989: Pioneered cleaner burning "emission-control" gasolines.

1990: Arco posts record $2 billion profit.

1993: Launches another restructuring of oil and gas operations in Lower 48 states. Company still in process of cutting 900-1,000 jobs.

Jan. 1994: Arco says restructuring will cost more than expected; takes $450 million charge against fourth quarter 1993 earnings.

Arco stock price (quarterly except for latest)

Monday: $98.00, down $3.00 Arco profit: (in millions of dollars)

1993: $269.0 Sources: Wire reports; company reports Researched by ADAM S. BAUMAN / Los Angeles Times

Los Angeles Times Articles