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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Wallace Rivers who wrote (30512)	10/8/1998 7:11:00 PM
From: articwarrior	Read Replies (1) \| Respond to of 95453

Any comments? HOUSTON, Oct 8 (Reuters) - In the cutthroat world of the U.S. oil refining industry, one man's merger synergies are often another man's lost livelihood. Faced with low growth in demand, wafer-thin margins and anemic returns on capital, refiners have been combining their businesses to cut operating costs...and payrolls. Employment in the U.S. oil refining industry peaked at just over 200,000 in the early 1950s, but had fallen to half that level by 1996, according to the Bureau of Labor Statistics. Last year brought a further fall to 97,000 and the latest figures show refining employment running at around 93,000. Consolidation continued on Thursday as Ultramar Diamond Shamrock Corp. (UDS) <UDS.N> of San Antonio, Texas, and Phillips Petroleum Co. <P.N> of Bartlesville, Okla., announced plans to combine their refining and marketing businesses in North America. As part of their drive to cut costs, improve efficiency and boost profits, the two companies said they planned to ax about 1,000 jobs out of a total of 29,000. Phillips said it anticipates 500 positions will either be transferred or eliminated from Bartlesville. Jean Gaulin, UDS' vice chairman, president and chief operating officer, said the job cuts would make up about $90 million of targeted "cost and productivity synergies" expected to reach over $250 million a year. Diamond 66, as the new company will be called, also expects to achieve annual capital savings of at least $50 million. The UDS-Phillips deal mirrors the merger earlier this year of the marketing and refining or "downstream" businesses of USX-Marathon Group <MRO.N> and Ashland Inc. <ASH.N>. The Marathon Ashland Petroleum (MAP) joint venture is aiming for annual cost savings of $300 million by 2001 and expects to cut some 2,000 jobs from a total of 30,000 jobs this year. MAP spokesman Chuck Rice said some 70 percent of MAP's work force is employed in its retail gasoline and convenience store network, which is where most of the job cuts will fall. In an even bigger deal finalized this year, Shell Oil Co., part of Anglo-Dutch oil conglomerate Royal Dutch/Shell Group <RD.AS><SHEL.L>, U.S. oil major Texaco Inc. <TX.N> and Saudi Aramco set up two joint ventures pooling their U.S. refining and marketing interests. The combination of Motiva Enterprises, covering the Gulf and East Coasts, and Equilon Enterprises, on the West Coast, is the biggest U.S. oil refiner with a market share of some 13 percent. Shell and Texaco have said they expect the creation of the joint ventures to boost employment in the long term. But in July, Equilon announced that it would close a small refinery in Odessa, Texas, offering to relocate its 100 workers. On Thursday, Phillips' stock fell $1.25 to $45.375 a share, while UDS' stock gained 31 cents to $23 a share, both in composite New York Stock Exchange trading. © 1997 Reality Online Inc., A REUTERS Company 1000 Madison Avenue, Norristown, PA 19403, USA. All rights reserved.