Derr, head of the nation's third-largest oil company, forecast 8.4 per cent growth in Chevron's overseas output of "liquids" -- primarily crude oil plus condensates -- in each of the next four years, and 4.5 per cent annual growth in worldwide oil and natural gas combined.

Derr, in a meeting with reporters after addressing Wall Street analysts, said spending cuts of $500 million from 1999's budget would result in "less than 1,000" job losses, or less than about 3 per cent of its total worldwide workforce of 34,000. He expected those job reductions to be achieved through attrition, a fairly modest cut in head count, compared with those announced by other large oil companies.

Pointing out "there is nothing in herefor brand new opportunities," Derr said the projected increases in Chevron's international crude oil output would come largely from developing the San Francisco-based company's giant discoveries in Kazakhstan and in deep water off the coast of Angola. Both the Tengiz field in central Asia and the Block 14 find off West Africa are estimated by industry experts to have well in excess of three billion barrels of commercially recoverable oil, ranking them among the largest oil discoveries in recent years.

Chevron did not have available 1998 average production figures, but end-1997 worldwide liquids production was 1.425 million barrels per day (bpd), of which 32 per cent was in the United States, while worldwide natural gas output was 2.865 billion cubic feet per day.

Michael Young, oil analyst at Deutsche Bank Securities, said Tuesday that Chevron's forecast for growth in oil and gas output in the next few years "does set Chevron apart from companies with vanishing production profiles. Not only does it havecost-cutting potential, but it could also grow volumes."

At the meetings Tuesday with analysts and reporters, Derr also introduced David O'Reilly, recently appointed as one of Chevron's two vice chairmen. The other is James Sullivan. O'Reilly will be in charge of achieving next year's cost cuts.

In a statement released from headquarters in San Francisco earlier in the day, Chevron said it would cut capital spending next year by 8 per cent to $5.1 billion, of which $3.7 billion would be for oil exploration and production. Most of that -- about $2.6 billion -- will be spent overseas, while US exploration and production spending will be $200 million lower at $1.1 billion.

Derr said that oil exploration and production spending in the US would be confined to deepwater Gulf of Mexico, with no new spending onshore in the lower 48 states.

Chevron shares fell sharply on Tuesday, losing $2.6875 to close at $83 in composite New York Stock Exchange trading. The fall was a continuation of the sell-off sinceChevron peaked last week above $88, as rumours of a takeover bid from Anglo-Dutch giant Royal Dutch/Shell Group fizzled out.

Derr stuck with the standard company line of not making any definitive comment about whether Chevron was considering any kind of merger, acquisition, takeover or alliance. And though not commenting directly on the recently announced mega-mergers of British Petroleum Co Plc with Amoco Corp. and Exxon Corp with Mobil Corp he made generally negative statements about the need to merge in the current troubled world oil market.

"I'm not saying mergers are bad, but mergers do have some downside to them. It is awful easy to take your eye off the ball of the ongoing business. I don't think you should undergo a major merger if the only thing you are going to get out of it is a one-shot reduction in costs," Derr said.