Oil Prices Spur Unocal to Cut Outlays

Unocal Corp. said it will cut $250 million from its planned $1.5-billion 1998 capital-spending budget because of depressed oil prices. The decision to postpone 17% of this year’s projects came after New York crude oil futures earlier this week fell below $13 a barrel for the first time since 1988. El Segundo-based Unocal said the belt-tightening won’t be a long-term concern. Unocal said the cuts will affect short-term production projects that are most hurt by low oil prices, non-oil and -gas businesses such as fertilizer and mining, and longer-term exploration projects that could use more study. The company said that because of the spending cuts, it won’t meet its goal of having 1998 oil and gas production in the continental U.S. match its 1997 production. It did not have an estimate of how much lower the figure will be. It will proceed with key longer-term projects, particularly overseas projects it doesn’t expect to begin until next year. Crude oil for April delivery closed at $14.30 a barrel on the New York Mercantile Exchange. Unocal shares rose 75 cents to close at $40.44 on the New York Stock Exchange.