Unocal meetings look at restructuring

Posted: Wednesday, August 21, 2002

Unocal Oil Corporation is holding meetings this week in Anchorage to determine the future of the company's oil and gas drilling operations in Cook Inlet.

The meetings of top company executives are being held to discuss how the company's Cook Inlet business unit can become more profitable.

"We're kind of moving our focus from growth to being more profit oriented in Cook Inlet," said Roxanne Sinz, company spokesperson .

"The bottom line is we have to improve our earnings margin if we hope to extend the life of some of the fields out there."

Sinz said Unocal was looking at multiple options for making the company more profitable, and she didn't rule out cuts to the company's inlet production and drilling operations, including the company's offshore drilling platforms.

"We'll become smaller and, hopefully, more profitable," she said.

However, Sinz said nothing specific has been decided on as to how or where cuts would come from. She said any personnel decisions would be passed on to employees before they become public.

She pointed to a company e-mail that was sent to employees last week that informed employees of the restructuring meetings.

"Basically what was indicated to our employees was we're undergoing a restructuring of our business unit," Sinz said of the e-mail.

In the past year, Unocal has been shaken by two high-profile setbacks to its Cook Inlet unit. The first came when three natural gas wells drilled in the Ninilchik unit in February came up bone dry.

The second major setback came in April, when a fire on the King Salmon platform injured four workers and caused the company to suspend operations on the 7,000-barrel per day platform for a month.

According to Sinz, both setbacks hurt the company's bottom line.

"Both of those things, let's just say they didn't help," she said.

In 2001, Unocal produced an average of 12,500 barrels of oil and 104 million cubic feet of natural gas in Cook Inlet per day. The company employs approximately 250 people on the Kenai Peninsula.

Sinz said meetings would be held throughout the week to determine what direction the company will move forward in. In the meantime, she said Unocal is doing all it can to keep its employees up-to-date as to their future with the company, and the company's future in the inlet.

"The company's main focus is, as decisions are made, we tell our employees," she said.



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