Low crude oil and natural gas prices from weak demand and oversupply, along with foreign currency losses in Asian downstream operations caused earnings to drop sharply, Texaco Chairman and CEO Peter I. Bijur reported.
Commenting on 1998 results, Bijur pointed to the following: Income before special items declined 50 percent in 1998 to $894 million, and declined 80 percent to $92 million in the fourth quarter. Average crude oil prices
hit their lowest levels in more than 20 years. Currency volatility in Asia caused fourth quarter foreign currency losses of $71 million in the international downstream operations. And cash operating expenses per barrel decreased eight percent for the year
"We are not standing still waiting for prices to improve. We are implementing significant cost and expense reductions across all of our businesses. These reductions, along with the announced $600 million reduction in our 1999 capital-spending program, will enable us to maintain financial flexibility," Bijur noted.
For 1998, Texaco's income before special items was $894 million, down from $1.9 billion for 1997. Net income for 1998 was $578 million after net special charges of $316 million. This compares to net income of $2.7 billion for 1997, after net special benefits of $770 million.