Whitehouse speaks out on safety policySohio ChairmanAlton W.Whitehouse hasissued this state­ment reaffi rm ingthe vital importanceof safety andoccupational healthprograms and pro- •cedures at Sohio: Whitehouse

"The recent tragedy in Ind ia result­ing from an accidental release ofmethyl isocyanate, a toxic chemicalused in the manufacture of pesticide,stunned the world.

"It dramatized the hazards thataccompany the manufacture and useof many materials employed inindustry.

"The accident has caused manycompanies to carefully reassess theirsafety programs. At Sohio, a thoroughreview of our safety and occupationalhealth programs and our emergencyprocedures is being conducted.

"I will have the results of thesestudies presented to Sohio's boardof directors, along with recommenda­tions for improvement if we findreason to question the effectiveness

of our present precautions."I want employees and the com­

munities in which we operate to knowthat safety is an overriding require­ment of every Soh io operation. Everymember of Sohio's management teamhas safety requirements and standardsto meet. These obi igations shou Id bewritten into their objectives or per­formance targets each year, andjudgment of their performance, inpart, wi II be based on thei r safetyrecord. This standard of performancealso applies to me.

"Ethically, and under Sohio's pro-

cedures, the management of Sohio'sbusiness groups and staff departmentsis required to report to Sohio's boardof directors any fatality that occurs inour operations, and its ci rcumstances.

"I also require that any major safetyhazard that develops in our operationsbe reported to the Office of the Chair­man. That report must include recom­mendations and procedures beingtaken to protect the safety and healthof employees and the community.

"Over many years, Sohio has main­tained a good safety record, largelyTurn to WHITEHOUSE SPEAKS, page 3.

Vol. 39 No.1 January 1985

Sohio outlines changein investment emphasis

~<ll.0ciiiUi~~};o<5ff. I

The move into Sohio's new world headquarters in Cleveland, shown here withits exterior nearly complete, is scheduled to start this summer.

Members of Sohio's top manage­ment, including Chairman Alton W.Whitehouse, President John R. Miller,and Vice-Chairman Thomas D. Barrow,made a major presentation Dec. 12in New York to security analysts.Sohio's officers outlined for theanalysts financial and operatinginformation of significance toinvestors.

Miller's presentation, discussing ashift in Sohio's investment emphasis,is of particular significance Thecomplete text of his talk, plus hisanswers to Questions posed by SohioNews, is on page 4. A summary ofkey points made by Miller in that talkfollows:

SOhiO'S major positioning invest­ments are behind us, and Sohio isentering a new phase in its evolution.It is moving from an era where posi­tioning investments were dominantto one where investments targetedtoward increasing profitability by

exploiting previously acquired assetswill play the major role.

• This new phase of Sohio's capitalprogram will be characterized byinvestments which should make con­tri butions to earn ings in the nearterm. The company will insist upona satisfactory return on all its assets.

• Investment levels in explorationand production will be governed bywhat we see as the long-term sustain­able income from that segment ofour operdtions.

• Investments in all of Sohio's busi­nesses will be evaluated against anumber of other options available tothe corporation: Opportunistic acqui­sitions, reduction of debt, increaseddividends, repurchase of stock all areserious alternatives.

• The primary measure for invest­ment decisions will not be absolutegrowth per se. Rather, it will be im­provement in long-term earnings pershare-or, more specifically, theimpact on the value of a share ofSohio's stock.

A newyear, a new building:Employees review

SPC-International created

A New Year. In Cleveland, some 3,000employees will merge in 1985 atSohio's new world headquarters.

At other locations, includingAnchorage, employees are busysettling into new facilities completedlate in 1984. (See related sidebarstory and photo on page 7.)

As 1985 unfolds, Sohio News askedemployees to share their thoughts onwhat the latest addition to theCleveland skyline means to them, tothe city, and to Sohio as a whole.

• "It's a plus for Sohio that we'reconsolidating into a building that hasa corporate identity linked to it. Ithink that identity has been lackingbecause we're scattered allover town,"says Connie L. Mansfield, manager ofContracts Administration for SohioOil Company in Cleveland.

"I deal with a number of differentcompanies around the country, and Iknow there's a certain connectionbetween a company and its building.

"I think this is a plus for Cleveland,

but I'm reservedly optimistic due tothe amount of available office spacecreated when we move this year. Onebuilding isn't going to make or breakthe city."

• Former Clevelander, turnedChicagoan, turned Lexingtonian,Grant T Becker says he hopes thenew building will motivate otherbusinesses and investors in theCleveland area.

"It's good for Cleveland's image. It'sgood politically for Sohio. And itcertainly has been good for the con­struction trades," says Becker, OldBen Coal Company's EmployeeRelations manager.

• "Some other cities I've lived in havedone a tremendous job revitalizingtheir downtown areas," says Richard F.Michael, Corporate Planning analystin Cleveland.

"The redevelopment usuallycentered around a particular buildingTurn to A NEW YEAR, page 7.

By Jim Kosowski

Foreign exploration and productionopportunities are the prime targetsof Sohio Petroleum Company­International, recently formed toevaluate such prospects for SohioP.etroleum Company (SPC).

"In forming SPC-International, weare simply making the progression toa full-scale exploration company withboth domestic and internationaloperations," says Richard A. Bray,Sohio senior vice-president andpresident of Spc.

"We haven't done anything over­seas before, except on a very limitedbasis," because, he noted, SPC hasbeen busy developing an explorationstaff to handle efforts in the Lower 48states and Alaska. SPC drilled anexploratory well in Australia earlierthis year in a joint effort with anotheroil company and has had a smallexploration program in Colombia.

James J. Hohler, former SPC execu­tive vice-president has been namedpresident of SPC-I nternational.

Hohler says SPC-International will

look for prospects with giant fieldpotential, which is defined as having500 million or more barrels of oil oroil equivalent.

"Overseas, there are many areaswhere exploration to date has beeninadequate. In addition, we believeour more modern tools and techniqueswill help us locate and explore giantprospects."

Turn to SPC-INTERNATIONAl, page 3.

INS IDE

Guaranteed R for car illsPage 6

The snake, the woman, the snarePage 2

2 Sohio News· January 1985

Snake seeksshelter, sneaksunder hoodYou probably remember the lineabout a 'tiger in your tank,' but didyou hear the one about a snake onthe engine?

"This woman came into the stationand asked if my son or I were afraidof snakes," says Elmer Hess, a Sohioservice station manager in Cincinnati."She said she had one on her engine.When we looked under the hood wesaw a big snake with diamond-shapedmarkings coiled around the engine.We called the police to let themremove it."

Hess speculates the snake probablyescaped from a neighbor's home andwas looking for a warm roost when itfound its way to the car engine.

The snake, a four-and-a-half-footboa constrictor, is being held at theCincinnati Herpetological Society,awaiting its owner.

Keeping 'service' in service stations

Sohio taps China marketSohio anticipates its relationship withthe People's Republic of China "willcontinue to grow and prosper," saysWilliam P. Madar, Sohio seniorvice-president and president ofSohio Chemicals and IndustrialProducts Company.

Sohio recently licensed the ChinaPetrochemical Corp (Sinopec) to useits process to manufacture acrylon­itrile, a chemical raw material used inmaking synthetic fibers for clothing,carpeting, and other products.

The plant will be built atthe Daqingpetrochemical complex in Manchuriain northeast China and will proc4Jce110mi II ion pou nds of acrylon itri Ieannually.

Sohio, through a large-scale adver­tising program in Ohio, is urgingmotorists to take advantage of mainte­nance checks offered when buyinggasoline at full-serve pumps atcompany and dealer stations.

"We put the 'service' back in servicestations," the ads proclaim.

"Although self-serve gasoline salesaccount for the majority of Sohio'sgasoline business, full-service isavailable at about 90 percent ofSohio's service stations," says Harrison1. (Hub) Bubb, general managerof Sohio Oil Company's Retail

The plant will be the second builtin China under a Sohio license. Thefirst plant, licensed 12 years ago inShanghai, also produces acrylonitrile.

"Sohio is pleased to expand a mostrewarding relationship with ourChinese friends," says Madar.

Chen Jinhua, Sinopec president,says acrylonitrile "is a product inhuge demand in Chi na and the projectis very significant"

The People's Republic of China andSovonics Solar Technology, a partner­ship of Sohio and Energy ConversionDevices (ECD) of Troy, Mich., also arestudying a possible joint venture toproduce and sell in China solar cellsthat generate el ectrici tv in sun light.

Marketing unit"We understand the desire to save

money through the economy of self­serve," Bubb says. "But this may be afalse savings if motorists ignorenormal car maintenance"

At Sohio full-serve pumps, trainedemployees conduct a quick, butthorough, "under the hood" mainte­nance check. Inspection includescrankcase oil level, radiator coolant,belts, hoses, battery, plus cleaning thefront and rear windows.

Results from a recent survey of 200cars in Ohio by the Ohio Motorists

They have agreed to establish ajoint committee to:• Develop product definitions andspecifications for China's solar needs.• Test production designs.• Select test and demonstration sitesin China.• Complete negotiations.

Sovonics solar cell demonstr~tion~.were held in late 1984 in Chinashowing how the cells power variousprod ucts, incl ud ing rad ios, televisionsets, and water pumps.

Final agreement on the solar cellventure is subject to approval by theChinese government.

Association show about half the carswere low on both radiator coolant andengine oil. Worn belts, underinflatedtires, low or corroded batteries, andfaulty hoses also were common.

Sohio is monitoring the full-serviceprogram through "checkers," whomake purchases at full-serve pumpsand provide the company with writtenevaluations of the service.

Motorists who fail to receive Sohio'sfull-service at full-serve pumps geteither a coupon for a free car wash atany Soh io company-operated car wash,or a free quart of motor oi I.

Seat belts saveemployees fromserious injuryWearing seat belts paid off for twoSohio employees involved in separateaccidents in which the company carsthey were driving were demolished.

Craig L. Taylor, Sohio Shale OilCompany manager, was en routehome in Salt Lake City rush-hourtraffic. He had to brake suddenly andhis car was struck from behind by aheavily laden pickup truck. Theimpact shoved Taylor's car forwardand under a truck stopped in frontof him.

The force of the collision broke theback of Taylor's car seat, but thanksto his safety belt he escaped with onlytwo minor knee bruises.

Richard B. (Rick) Stalzer, seniorengi­neer in Corporate Engineering at HomeOffice, was driving on an interstatefreeway in the Cleveland area when acement truck from a construction sitecut across the lanes of traffic a fewhundred feet in front of him.

Stalzer's car skidded into the truckbut he survived the collision withouta scratch.

Both men agree that wearing seatbelts saved them from seriousinjuries.

. FIN. A~ C I A LIN Die A TOR SJob training for young adults Dec. 1983 Nov. 1984

Sohio has awarded a $200,000 minorityjob-training grant to Public/PrivateVenture (PPV), a Philadelphia-basedtraining and public policy agency.

The grant will provide on-siteconstruction training by local tradeunions for 200 young adults age18 through 24 in Cleveland, Dallas,Houston, and San Francisco

Fifty students from each city willparticipate in the program.

"Soh io is proud to provide th is grant

which, in turn, will help inner-cityyouths revitalize our neighborhoodsand make them more attractive forresidents and other communitymembers," says Charles E. Taylor,Sohio's Corporate Contributions andCommunity Affairs director.

About $400,000 in public andprivate monies also will be raised ineach city to help fund the programfor a national total of $1.6 million,says Taylor.

Average price Sohio common stock l

Price/earnings rati0 2

Yield 3

Standard & Poor's 500 Stock Index­Monthly AveragePrice/earni ngs rati02

VieW

Two-year Federal Treasury Notes closing rate

1 Monthly average composite closing price2 Based on earnings for the previous four quarters3 Based on most recent annual dividend rate

$43.087.0

6.04%

164.3611.7

4.38%

10.82%

$43.757.0

6.4%

166.279.7

4.47%

10.52%

Sohio News· january 1985 3

The late shift: Theywork, you sleepduring the day. "Third shift gives youa chance to get your work done, too,"he says. "The phone's not constantlyringing, and you don't get called intomeetings."

Cooney, a 12-year veteran of theData Center's third shift, says goodmorale among employees is one keyto a successful operation.

"Cooperation among the people onthe shift is terrific," he says. "We'redoing a vital thing, trying to get dataout by morning. Without their support,the work simply wouldn't get done."

It's 2 A.M., and Cooney reviews theprogress of jobs on the hot sheet. Hehas to juggle the job sequence to stayon schedule. Cooney taps in codes ata terminal for a half-hour before hepushes back his chair. "At turnover,we had 337 jobs to run," he says. "Westill have 200 to finish by 7:30."

Cooney goes to the print room forpayroll check forms. The Data Centerprints a stack of employee checksevery night, as well as any next-dayreports that req uire data processi ng.

All systems goAs the shift reaches its halfway

point, everything seems to be runningon schedule.

"People are frequently surprised bythe quick turn-around time from thirdsh ift," he says. "Everyone on the staffhas an idea of what needs to be doneat certain times.

"Later, for example, we might needextra people by the printers. By theti me I go to tell them to sh ift overthere, they are already aware of thepending move to the printers. Thingsgo easier when you work with peoplelike that."

As we bleary-eyed visitors from thefirst-shift shuffle out the electronicdoor at 3 :30 A.M. to get some sieep,Cooney still has a half night's workto do.

He sits at a terminal, fingers clickingon the keyboard as he watches chainsof numbers and letters scroll up thescreen. Periodically, he jots downnumbers on the back of a computerpunchcard. Around him, the giantmachines murmur.

Dan Goldberg, who dabbles on a homecomputer, is a freelance writer inSohio's Government & Public AffairsDepartment.

tasks is to check the "hot sheet," apriority list of jobs for the night. Hemonitors the progress of jobs with anemployee assigned as the "queuecontroller."

"jobs have to be run in a certainsequence," says Cooney, watchingthei r progress reports flash on aterminal.

"We can't skip over a program,either, so if one gives us a problem,it holds up others that we have to run

by morning. Then we may have towake up a programmer or an engineer,depending on where the problem is,"he adds.

When asked the inevitable questionabout working while most of the citysleeps, Cooney repl ies: "There areadvantages and disadvantages. Forone, there's no traffic when I come towork. And when i drive home, trafficis bumper-to-bumper coming into thecity, while I cruise down open highway.

"When it's nice out, some of theguys may play golf or something afterwork," he continues. "Usually in thewinter, I sleep through the morning.

"The only hard part is coming backfrom weekends. The first night back isa rough one-you want to close youreyes at about three or four in themorning."

Third Shift Supervisor BruceSjostrom also mentions the advantageof being able to spend time with family

7:30 A.M., the end of the shift; andnightly tasks, such as movement ofdata between different types ofstorage devices.

Many of the jobs are started by thefirst or second shifts, and the thirdshift must complete them by morning.

"You might say the third shift getsthe football at the goal line and isresponsible for taking it over thatline," says Cooney.

Cooney's overnight domain includes

computers ranging from an IBM thesize of a small van to Sohio's newControl Data Cyber 205 super­computer-one of the largest in thecountry-which fills its own room.

On one side of the main room, 43refrigerator-sized tape drives whirconstantly, feeding information fromreels of tape into the computers.Two or three members of Cooney"s13-operator staff mount and dismountthe computer tapes, as needed.

Hundreds of tapes may be processedfor various business units each night.In the tape library, employees pullneeded tapes from the 34,000 filed onthe racks.

Meanwhile, across the main aisle,six printers work feverishly, producinga major portion of ton ight's product­hard copy reports of updates andchanges to a variety of system databases.

One of Lead Operator Cooney's first

IIt's 6:30 A.M., and Richard Cooney nears the end of his workday.

By Dan Goldberg

The Sohio headquarters lobby inCleveland is eerily quiet at 11 :30 P.M.

Except for the security guards,the usually bustling building looksdeserted, until you get off the elevatoron the seventh floor of the LTV SteelBuilding. That's where Sohio'sCleveland Data Center operates24 hours a day, 365 days a year.

We're going to get an ID badge andsit in with the night shift of Sohio'sheadquarters computer center, whichprocesses work from Sohio unitsnationwide.

The giant computers here maymonitor crude oil transportation data,help prepare information for leasebidding, and calculate figures forthe annual report all in addition toprocessing heavy workloads fromdaily production systems.

Buzzes, hums, and thumpsAs a security guard buzzes open the

heavy automatic door, you hear thedrone of the computers, a sound thatwi II su rround you the rest of the night.

Bright lights wash over the whiteceiling tiles, white walls, and whitefloor tiles. The raised floor-designedso miles of computer cable can rununderneath-thumps with eachfootstep.

It is turnover time in the Data Center.The second shift crew hands controlof Sohio's computer nerve center overto the third shift. Workers exchange"good mornings" and "good nights."

In the "queue control center," a halfdozen computer terminals camp in aforest of cabinets full of hummingcomputer hardware. The second- andthird-shift supervisors and "leadoperators" compare notes here.

"Is the '205' still down?'·"They're tryi ng to determ ine where

that hardware problem is.""Let me see the hot sheet.""Did they change the system dump

drives?""Is Houston connected OK?""Did you tell Rich about the Cyber?""Rich" is Richard Cooney, lead

operator for the third shift at the DataCenter. It's Cooney's responsibilityto keep all the processing jobs onschedule and running during the night.This includes data slated for distri­bution to various Sohio offices by

SPC-Interna'tional created

Whitehouse joins Ethics Center board

Whitehouse speaks outon Sohio safety policy

The Standard Oil Company willconduct its business in a mannerwhich will achieve the followingprincipal objectives:• Produce and promote thehealth and safety of its em­ployees, customers, and otherswho may be affected by thecompany's business activities.• Conduct operations inharmony with the naturalenvironment.• Comply with all pertinenthealth, industrial safety, productsafety, and environmental,statutory, and regulatory obli­gations.• Provide programs for health,safety, and environmental reviewto ensure compliance with thispolicy.

Continued from page 1.because our people have been welltrained, and we have had safetydesigned into operating procedures.

"However, safety in handlingdangerous material also calls forconstant awareness and vigilance bySohio employees. We have well­established procedures, but there stillcan be human failures. When peoplehave handled such materials for manyyears without incident, they can losethe alertness and sense of the impor­tance of the precautions that havekept us safe in the past.

"I am taking this opportunity tospeak on this subject to emphasizemy personal concern and the impor­tance I want to see given to safetyin all our company's operations.Safety is a shared responsibility, andwe must all do our part.

"I have asked that Sohio's health,safety, and environmental policystatement be printed here. It appliesto all of Sohio's business groups andoperations."

Hohler says SPC-International staffwill be added slowly.

In a related move, William j.johnson, formerly executive vice­president, Planning and Administra­tion, assumes Hohler's responsibilityas executive vice-president, Explora­tion, while retaining responsibilityfor the Planning and Analysis andLand departments.

David D. Lybarger, executivevice-president, Production, willassume responsibility for Administra­tion and Control.

Hohler, johnson, and Lybargerreport to Bray.

been a longtime consultant to Sohioand was instrumental in assisting usin developing our 'Principles ofBusiness Conduct' program,"Whitehouse says.

Sohio's program is designed toencourage employees and manage­ment to adhere to Sohio's businessprinciples and ethics.

Continued from page 1.No specific projects were

announced.Hohler had headed SPC's explora­

tion effort since 1979, when he joinedSPC from Mobil Oil Corp.

Reporting to Hohler are Preston G.Rennie, general manager, Operations,and Wilfred E. Bischoff, Explorationmanager.

Bischoff joined SPC in 1978. He hadbeen with BP Alaska Inc. from 1970to 1978.

Rennie has been with Sohio for 35years in exploration, production, andengineering positions.

Sohio Chairman Alton W. Whitehousehas been elected to the board of theEthics Resource Center.

The Center, a national nonprofitorganization headquartered inWashington, is committed tostrengthening ethical values inbusiness and government.

"The Ethics Resource Center has

4 Sohio News· January 1985

Sohio outlines changein investmentemphasisFollowing are remarks madeby John R. Miller, Sohiopresident and chief operatingofficer, at a major presenta­tion Dec. 12 in New York tosecurity analysts.

Ie nature of Sohio's capital invest­ment program is changing, and Iwant to comment on that change thismorning.

As a lead-in to these comments,however, let me touch on a few ele­ments of our fundamental approachtoward investment which have notchanged.

Our overriding goal continues tobe the creation of real long-termeconomic value for our shareholders.

As in the past, our investmentswill be limited to those sectors ofthe economy that are important andenduring. And to areas where weeither have a competitive advantage,or believe we can create one.

This means we'll concentrate onthose areas in which we're now oper­ating. We'll balance some of the risksof the energy business by buildingupon the strengths of other partsof the company.

To create attractive opportunitiesin these other businesses, we'll expandour base of technology and business

skills. And we'll exploit the asset basewe've acquired in the past few years.

So, what's new and different?As a corporation, I believe we have

come a long way toward positioningourselves for the future.

At the time Prudhoe Bay wasbrought onstream, our business basewas extremely small and narrow. Sincethen, we've made substantial invest­ments in exploration, coal reserves,metals mining, chemicals, andrefining and marketing.

But now, our major positioninginvestments are behind us, and weare entering a new phase in ourevolution.

The challenges are different. Theemphasis has shifted.

And we're moving from an era wherepositioning investments were domi­nant to one where exploitationinvestments will play the major role.

In exploration we've been acquiringpeople, acreage, and technical data.Now the emphasis will shift todrilling to evaluate and developour land position.

In coal, we've been acquiringreserves. Now the emphasis will beon developing those reserves aspromptly as the market will permit.

In chemicals and industrialproducts, we are completing theprocess of rationalizing the businesseswe acquired. Now we will be usingthis segment of our operation to turnnew technology into profits.

In Sohio Oil, the challenge will beto integrate the assets we've acquiredinto our marketing and refiningbusiness in an effective manner.

In the case of Kennecott, the direc­tion is not so clear. But, we intendto sort through the alternatives opento us and decide what's the bestcourse of action in the face of someextremely tough business conditions.

Understandably, this new phase ofour capital program will be character­ized by investments with shorterhorizons-such investments shouldbring our nonincome-producingassets into play within a reasonableperiod of time. We will insist upon asatisfactory return on all of our assets.

Barring that, we will take whateveractions are necessary under thecircumstances.

Another dimension to our capitalinvestment program is its size and theallocation of capital within the overallprogram. Any discussion of this aspectmust by necessity, focus on PrudhoeBay and its impact upon Sohio.

Prudhoe Bay is large by any stan­dard and its significance to Sohio isenormous.

The initial high rates of productionfrom Prudhoe Bay will be decliningin a few years. That decline, albeitinevitable and predictable, willfortunately be gradual. And througha combination of both standard andinnovative recovery techniques, weexpect Prudhoe to remain a significantcontributor to earnings well into thenext century.

Nevertheless, with the decline inPrudhoe Bay production, a commen­surate decline in earnings and cashgeneration from that asset is likely

------------------------------------------------------.

Q&AIn connection with histalk to security analysts,Sohio News posed thefollowing questions toPresident John R. Miller:

Q: How do you personally view thisnew phase in Sohio's capital invest­ment program? How will employeesbe affected?

A: Just so it's clear, let me begin bysayi ng that the change in the natureof our investments is one of emphasis.The shift in focus is to what I'velabeled "exploitation investments."I view the change as an evolutionaryone, a logical extension of our invest­ment efforts of the past or, if youwill, the next phase in our program.

I don't see this change as one thatwill have an abrupt or direct impacton employees. But given the fact thatour future investments will providemore immediate contributions toearnings and will convert assets thatare cu rrently id Ie into sou rces ofrevenue, I believe that all of ourstakeholders, employees included,wi II benefit.

Q: You have said, "We will balancesome of the risks of the energy busi­ness by building upon the strengthsof the other parts of the company."What are some of those strengths?

A: Even within the energy businessitself we can take steps to balancethose risks. The greatest risk in theenergy business is on the explorationside. To some extent we are balancingthat risk with our expanded involve­ment in the downstream petroleumbusiness-marketing and refining­wh ich is infl uenced by externalfactors that are different from thosethat impact upon exploration.

Similarly, our coal business repre­sents a further spreading of risks,and I expect that we will be able tocapitalize on the strengths which wehave demonstrated in the coal area tomake that an increasingly importantpart of Sohio.

Outside of the energy business, wehave a number of interesting thingsunder development that could beimportant in Sohio's future. Withouttrying to be all-inclusive, ones thatquickly come to mind include photo­voltaics, narrow-strip copper manu­facturing techniques, fluidized bedboiler technology, and ceramics.Also we have enjoyed for some timea leading position in acrylonitrileprocessing technology and catalysis.

Q: Sohio's competitors tend toreinvest a very high percentage ofexploration and production pretaxearnings in their exploration andproduction efforts. You have said thatyou don't think Sohio should do thesame because its exploration andproduction income is dominated by asingle oil field that will be on thedecline before the end of the decade.Why does this domination by PrudhoeBay make our exploration situationdifferent?

A: In a sense this dimension of ourproblem is not significantly differentfrom that of our competitors, butperhaps the fact that our oil produc-

tion is dominated by one field bringsthe challenge into better focus.Production rates of all fields declineover time, and our industry is findingit more and more difficult to maintainproduction by offsetting these de­clines with oil from new sources thatcan be produced economically. Inour case, with the domination ofPrudhoe Bay, this point is broughthome more dramatically, perhaps,than in some other companies whichhave production spread across a widenumber of areas, each in varyingstages of its production life.

However, there is another aspect tothis problem which is markedly differ­ent in our case. Our competitors, forthe most part, have mature explora­tion programs. Consequently, thevarious phases of their programs­leasing, seismic, drilling-are inreasonable harmony, and ongoingresults bear some relationship to pastefforts. In effect, they have achievedwhat I would call a "steady-state"operatLon. Our program, being rela­tively new, has not yet achieved thatsteady state. The question then iswhat level of exploration and produc­tion (E&P) effort should we target.

As I mentioned to the analysts, Ibelieve it is prudent to size our effortsagainst what we currently see aslonger-term sustainable earnings fromour E&P operations, as opposed toearnings from the initial surge of highproduction rates coming out of thePrudhoe Bay Field.

------------------------------------------------------_..

John R. Miller

to occur. At the same time, thepositioning investments, which Imentioned earlier, carry with themimplied commitments for follow-oninvestments if they are to becomeproductive. In fact that's why manysuch positioning investments weremade.

Given this set of circumstances,one of our most important tasks willbe to manage our spending programsand allocate our resources in a waythat will assure that we do, indeed,achieve our goal of creating reallong-term economic value for ourshareholders.

We continue to believe that ourfive basic businesses will offer goodinvestment opportunities.

But we recognize that reductionof debt increased dividends, andrepurchase of stock represent validcompetition for capital. Said anotherway, growth in absolute terms maynot provide the greatest benefit tothe shareholder in the long run.

As we deal on an "ongoing basis"with this issue of capital allocation,the primary question quickly becomesone of sizing our exploration andproduction program. As most of youknow, this segment of our business isone in which we have invested heavilyover the past several years.

The "how big" question is a toughone. Our program has grown rapidlyfrom essentially nothing to majorstatus in a few years.

Our competitors tend to reinvesta very high percentage of Exploration& Production (E&P) pretax earningsin their exploration and productionefforts.

Should we do the same? We don'tthink so because our exploration andproduction income is dominated by asingle oil field, which will be on thedecline before the end of this decade.

Instead, we believe the size of ourE&P program should be governed bywhat we see as a sustainable level ofincome from that segment of ouroperations.

At this point we can see sustainableincome from Prudhoe, obviously, aswell as from our planned develop­ments in Endicott and Lisburne.

Having said that, in the near termour total E&P expenditures willnevertheless remain high. Theseexpenditures will be dominated bydevelopment costs for Endicott andLisburne and the cost of drilling toevaluate land already acquired.However, the pure exploration por­tion of that program will probablydecline. Over time, spending patternswill be routinely adjusted based uponresults. And, if we're as successfulas we hope we'll be, adjustments toplanned exploration expenditurescould be upward.

Our other businesses are being

encouraged to develop investmentopportunities, but the level of capitalwhich can prudently be allocated tothem is governed by more conven­tional restraints-such as industrygrowth rates and share of market.Moreover, these investment proposalsmust meet our return criteria and fitour corporate goal and investmentphilosophy.

Yu will be hearing from each ofthe business heads later today. But letme give you a thumbnail sketch ofthe prospects as I see them.

Our exploration and productionprogram is a good one. The ground­work has been laid for a successfulprogram, and we are competitive wi thother majors in terms of land positionand drilling prospects.

Downstream, the outlook forpetroleum product demand is flatand profits are weak. But th is is an areawhere Soh io has long been successfu I.The acquisition of Truckstops ofAmerica and the impending acquisi­tion of certain Gulf Oil propertiesfrom Chevron are transactions whichtake advantage of ourskills in this area.

Our coal business improved sub­stantially this year, even though indus­try conditions were not favorable. OldBen Coal Company has developed asound strategy for growth and we'reenthusiastic about its prospects forthe future.

The Sohio Chemicals and IndustrialProducts Company (SCIPCO) is alsomaking earnings progress. We havedivested a number of businesses, orparts of businesses, which didn't fitour strategic plans. In addition to im­proving the profitability of its existingbusinesses, SCiPCO will serve as ourprime vehicle for commercializingnew technology.

Metals mining is a difficult problem.

Sohio News· January 1985 5

The complex and adverse businessclimate which impacts the profit­ability of this segment has causedus to do some hard thinking. Our Utahproperty is an extensive and high­quality domestic reserve. But it isnot profitable at today's prices with itsantiquated facilities. During thecoming year, we will face the toughdecision of whether to modernize thisfacility or opt for another courseof action.

What's the bottom line?• Sohio has a strong cash flow that isassured for some time;• We have achieved a position offinancial strength;• We have a significant, but as yetunproven, exploration programunder way;• We have a large and profitabledownstream petroleum business;• And we have a range of opportuni­ties for earnings growth in our metalsmining, coal, chemicals, and indus­trial products businesses.

The mission is clear and well under­stood by each of our businesses.

We believe we have a full stable ofopportunities and a sound approachto judging their merits. And, we havethe financial wherewithal to takeadvantage of them.

However, as the businesses bringforward their investment proposals,we will be evaluating them against anumber of other investment optionsavailable at the corporate level.Opportunistic acquisitions- reduc­tion of debt- repurchase of stock­all are serious alternatives.

The ultimate test will be the well­being of all of our shareholders. Theprimary measure wi II not be absolutegrowth-per se. Rather, it will be thelong-term earnings per share impact­or, more specifically, the impact onthe value of a share of our stock.

Thank you .

._-----------------------------------------------------------Q: Is it fair to say that the changein the capital spending program willprobably have the greatest impact onSohio's E&P business?

A: This facet of our business has beengrowing dramatically in the past fouror five years, but we all recognizedthat as the program matured thegrowth would level off and we wouldhave to defi ne a level of effort thatwas appropriate for us.

An initial exploration investmentcarries with it an implied commitmentfor substantial follow-on investmentfor such things as drilling, technicalsupport, field development, trans­portation, etc., assuming we'resuccessfu I. We need to establ ish thegeneral scope of our E&P effort earlyon to avoid building up future com­mitments in excess of what can befunded within the guidelines set forthwithout relying on price increases orsuccess in areas where our capabili­ties are yet to be fully demonstrated.

In that context, we already are com­mitted to maintaining E&P expendi­tures at or near recent levels for severalyears as we implement the Alaskandevelopment projects we recentlycommitted to, and explore andevaluate the acreage we've acquired.

Q: Do your comments to the securityanalysts mean that the company hasdowngraded the possibility of findingnew oil and gas, both in Alaska andthe Lower 48 states? Or has SohioPetroleum Company's current explora­tion effort simply laid the groundworkthat it needs?

A: Clearly the latter. We believe wenow have a competitive land positionand promising drilling prospects. Butpromise doesn't generate profits.Hydrocarbons do. We now need toput the emphasis on drilling thoseprospects as opposed to the initialpush to acquire a land and dataposition. We'll be supplementing ourland position from a growing base ofknowledge as our program matures.

Q: Does the change in Sohio's capitalinvestment emphasis mean that thecompany will essentially end majorinvestment in expansion - furtheracquisition of coal reserves, oil andgas leases, or marketing areas, forexample?

A: No. But as I mentioned earlier, ourinvestment in future coal reserves,oil and gas leases, etc., will be moreselective and aimed toward augment­ing our position in a way which willenhance existing programs and besupportive of our efforts to bringcurrently idle assets into play. As anexample, in total we have ample coalreserves. However, a selected acqui­sition of reserves which could beaccessed from one of our existingactive mines, or which could aid usin accelerating the development ofidle assets, might prove attractive.

Q: How might reduction of debt andrepurchase of stock affect us?

A: The question is one of prudentallocation of capital. The alternativeinvestment options of reducing debtand repurchasing stock are just that­options. We are now seeking andwill continue to seek and encourageinvestment opportunities in all partsof our company. But we dare notpermit our strong cash-flow positionto cause us to become complacent inour investment decisions. We all needto maintain an awareness of the factthat there are these alternative usesof capital against which internalproposals must compete.

The ultimate capital allocationdecisions will be made with an eyetoward the long-term strength andwell-being of our company. The moreoptions available to us, the greaterthe odds that we will achieve ourlong-term goal.

Our shareholders, including manyof our employees, will benefit directlyif we are successful in increasing thevalue of a share of stock by taking fulladvantage of all the options availableto us. From the employees' viewpoint,I sincerely believe that we will allbenefit by working for a company thatcontinues to be strong financiallyand makes steady progress toward itslong-term goals.

Q: You say Sohio has achieved aposition of financial strength. Doesn'tthe current adverse business climate(e.g., declining oil prices, the difficultcopper market) threaten that finan­cial strength?

A: Sure, it has an impact, but ourfinancial position today is very securewhen viewed in Iight of the precariousposition we were in at the time ofthe Trans A laska Pi pel ine Systemstart-up. Since that time, we have beenable to diversify over a broad basewhich limits our exposure to weak­nesses in anyone sector of theeconomy or problems in anyone partof our operations. More importantly,however, J'm confident that petro­leum will continue to represent anessential economic need as far intothe future as I can see, despite theshort-term uncertainties. What we'retalking about are the steps necessaryto preserve and build on our currentposition of strength.

-----------------------------------------------------

6 Sohio News· January 1985

Sohio ProCare courtsauto-repair customer

Q;ccViQ)U::J

Ci5is52o&

Ron Barrow, ProCare Service unit manager at Sohio's Monroe and Talmadgeservice station in Toledo, Ohio, discusses ProCare's unique service packagewith a customer.

By Argia Collins

In today's consumer-wary environ­ment, a company committed to servingcustomers is a prized find.

But in the auto-repair business,consumers sometimes question howsincere that 'commitment' really is.

Sohio's ProCare operations addressthese concerns with qual ity work doneat state-of-the-art automotive repairfacilities All work is guaranteed.

Six ProCare facilities opened lastJune in Toledo, Ohio.

Nineteen Ohio ProCare centers arein various stages of construction inCincinnati, Dayton, Columbus, andToledo. The centers are expected toopen th is spri ng.

Sohio has invested more than$4 million in the ProCare programto date.

Additional Ohio ProCare facilitiesare planned in Akron, Cleveland,Canton, and Youngstown. Construc­tion at these sites is expected to bewrapped up in the fall of 1985 andspring 1986.

"Industry-wide surveys show aneed for a program like ProCare.Customer response has been excel­lent," says James R. McMillan,manager for Sohio Oil Company's CarCare operations.

"Independent consumer researchindicates that automotive repaircustomers nationwide have two majordemands," says McMillan.

"First, customers want to receive agood value for their automotiveservice dollar. Second, and moreimportant, customers want their carsrepaired by someone who is competentand trustworthy.

"Sohio's ProCare promise gives ourservice people a standard by which tooperate," he says.

"It says to the world that we'recommitted to giving quality service atreasonable prices and that we willalways conduct our business in aresponsible and fair manner."

McMillan says Sohio's ProCareservice program is unique to theindustry in two ways.

Each ProCare technician averagesabout 175 hours of technical training.

"Our commitment to intensiveeducation is the key to quality repairservice," says McMillan. "This givesus the competitive edge in the repairbusiness." ~

Additionally, McMillan points outthat Sohio ProCare facilities have aunique customer service packagewhich includes extended servicehours to accommodate "working­people hours."

Part of that program includes ano-charge "loaned" car for motoristswho drop off their cars for repairsbetween 4:30 P.M. and 6:30 P.M., andreturn the loaned car before 8 A.M.the next day.

"Our customer service program isdesigned to deliver our promise.That's why we have extended hours,extensive training for our servicetechnicians, a loaned-car program,our promise, and written guarantee­all are proof of Sohio's commitmentto service," McMillan says.

"Our marketi ng strategy is simple­we've based our business on satisfyingcustomers. I think ProCare is a primeexample of Sohio's developing aservice technology that keeps pacewith the needs of today's customers."

The ProCare Promise

If therc's nothing wrong with your car,lIe \\on't fix it.

If there i", lI'e'lI fix it right

If for an\, reason it's not right \~'e'l!

do it o\'er or refund )/our money.

The work we do will be done on time.The h,lI I ()U get 1\l1! nel er he more

than the e'timate IOU approl'e.

\ \ e guarantee our \\"Ork

We guarantee our parts.

Sohio ProCare

We keep our word

'Lambchop' beefs up Lima celebrationKennecottIAnacondanear agreementon joint operationAn agreement is expected to befinalized early this year betweenKennecott and Anaconda MineralsCo. to operate the mining and con­centrating properties and facilities ofKennecott's Utah Copper Divisionand Anaconda's Denver Carr Forkunit on a cooperative basis.

Anaconda Minerals Co. is a unit ofAtlantic Richfield Co.

Kennecott would be the operatorand receive 96 percent of the produc­tion from the operations in theproposed agreement.

Each company would retain title tothe reserves, properties, and assets.

The venture is being consideredbecause it would make production atboth facilities more efficient andreduce operating costs.

~::;;cro--'

is52o.c.CL _

Noted ventriloquist Shari Lewis and sidekick "Lambchop" with Peter Clute,of Sohio Chemical Company, during a Sohio-sponsored holiday event inLima, Ohio.

Noted ventriloquist Shari Lewis andsidekick "Lambchop" topped off arecent weeklong celebration in Lima,Ohio, marking completion of thatcommunity's Town Square MemorialCivic Center

About 1,400 Lima residentsattended Lewis's Sohio-sponsoredperformance.

"We've traditionally supportedholiday cultural events in this city,"says Peter Clute, manager of HumanResources at Sohio Chemical Com­pany's Nitrogen Chemicals Divisionin Lima. "For this event, we wanteda family-oriented show for Limaresidents and Sohio employees"

Sohio Chemical Company is a unitof Sohio Chemical and IndustrialProducts Company.

In another hoi iday program lastmonth, Sohio sponsored two perform­ances of Tchaikovsky's classic holidayballet, "The Nutcracker," featuringthe Lima Symphony Orchestra andthe Indianapolis Ballet Theatre.

"Through Sohio's sponsorship,"says Elizabeth Sudheimer, businessmanager of the Lima SymphonyOrchestra, "our community has ex­perienced a variety of cultural events."

Sohio News· january 1985 7

A new year, a new building

Connie Mansfield

Continued from Page 1.

or structure-like the Arch in St. Louis."Perhaps the Sohio Building can be

a similar catalyst in revitalizingCleveland," Michael says.

• "I think the building will really standout in the downtown area," saysSharon Wong, Accounting Research& Planning analyst in CorporateFinance & Control. "I believe thatmany Clevelanders think the buildingrepresents Sohio's commitmenttothe city.

''I'm looking forward to moving.We'll be on the 37th floor."

• "I saw plans for the new bu i Id ingwhen it was sti II on the drawi ngboard/' says Richard Kutz, Safety &Environmental Quality manager atSohio Petroleum Company in Houston.

"Before the decentralization, I wasin a safety unit at Home Office andwe contributed initial input on safetysystems and plans for the building.

"I still make frequent trips toCleveland for safety and healthmeetings, and! have been able tofollow the construction progress,"Kutz says.

"I think that putting retail space inthe Atrium is one of the best thingswe could do for the downtown area."

• ''I'm really looking forward tomoving into the new building. I'veseen a layout of my 10th floor officeand it's nicer than anything I've hadbefore," says joquine Martin, Em­ployee Information Systems specialistin Corporate Human Resources.

"I'm interested inwhatkind ofstores,banks, and other businesses will be inthe Atrium, and also if there will beany automated banking machines.Right now these are very convenientto me," Martin says.

"I use public transportation-theRapid Transit- so I'll miss the Terminal

Grant Becker

Tower concourse, which lets me moveindoors from the Rapid to my officeduring bad weather. On the otherhand, I use the Cleveland PublicLibrary a lot and I'll be closer to it."

• "The building's design is delightful,"says Steven Villas, Constructionmanager in Retail Marketing. "It's abig improvement over our typicalbox-type buildings in downtownCleveland.

''I'm in the State Office Buildingand feel like I'm out in (suburban)Lakewood or across the state inToledo, even though I'm just down theblock from Sohio's main officebuilding," Villas says.

"Although the building is an obviousplus for Cleveland, I hope peopledon't think one company's commit­ment and building will turn the cityaround. Cleveland still has a lot ofother problems to deal with."

• "The new headquarters will bringeveryone working together under thesame roof, which will be more efficientand save time," says Toan V. Nguyen, anengineer at Sohio Chemical Companyin Cleveland.

Steve Villas

Richard Michael

"I can see the construction outsidemy window. Although this keeps mesomewhat informed, in addition to thepublications we get about the build­ing's progress, I'd like to know more,"Nguyen says.

"When it's completed, I'm lookingforward to using the fitness center andwalking around the Atrium with allthose nice shops."

• Console Operator Robin Kendrick,who works in Computer Operations inthe Cleveland Data Center, is oneCleveland-area Sohio employee who

Richard Kutz

Robin Kendrick

Sharon Wong

won't be moving into the new building."I would love to move, but our

department will stay in the LTV SteelBuilding due to the cost of moving thecomputers," Kendrick says.

"It's a disappointment in one way,because of the excitement of a newbuilding, but there are some advan­tages to staying where we are. Parkingshould be easier. And those of us whotake the Rapid Transit can stay undercover by walking through the TerminalTower concourse. It could get prettycold in the winter walking outdoorsto the new building."

Joquine Martin

loan Nguyen

Anchorage Sohioans settleinto their new officesIn December, about 300 employees moved into the newSohio Alaska Petroleum Company (SAPC) headquartersbuilding in Anchorage.

"We expect everyone to be in the building by theend of spring 1985," says john Bauer, facilityplanning manager.

A "centipede tunnel" is being used to move furnitureand office and computer equipment into the building.

The centipede is a portable enclosed tube thatconnects the building with heated moving trucks. Theheated centipede helps protect furniture and sensitiveequipment from the cold.

The 14-story tower and con necti ng three-story servicebuilding are on 16 acres of a 33-acre site. When themove is complete, SAPC employees previously locatedin six Anchorage office buildings will join forces underone roof.

New home for Sohio Alaska PetroleumCompany employees.

8 Sohio News· January 1985

OrtTHEMOVE

SCIPCO appoints 5 vice-presidentsSohio Chemicals & Industrial ProductsCompany (SCIPCO)

RipleyKorty

Chemicals manager. Donovan J.Kuenzli relocates from Lima toGreen Lake, succeedingHougland as manager of theacrylonitrile plant.

With Dorr-Oliver Incorporated atLebanon, Ind.: Joining theCommercial Filters Division areCharles J. Ashelin, seniordevelopment engineer; DavidJ. Korty, planning & inventorycontrol coordinator; andStephen L. Ripley, seniorprocess engineer.

Ashelin

HouglandBartos

Kuenzli

With Sohio Chemical Company:Leon E. Bartos transfers fromLima, Ohio, to Cleveland tobecome Engineering manager.John W. Hougland moves fromGreen Lake, Tex., to Lima toassume the new post of Lima

Shockey

director-Central Region forKennecott at Salt Lake City.

Carmen G. Slominski, vice­president for HumanResources. Slominski formerlywas SCIPCO's industrial rela­tions director.

Robert F. Shockey, vice­president for Administrationand Control. Shockeypreviously was OperationsPlanning and Control managerfor the Industrial ChemicalsDivision.

Slominski

recently was Administrationand Control vice-president forSohio Chemical Company.

Thomas E. Standing, HumanResources vice-president.Standing previously wascorporate director of EmployeeRelations.

Three appointments inSohio Chemical Company are:

F. Harlan Flint Jr., vice­president for Environmentaland Government Affairs. Flintmost recently was Govern­ment and Public Affairs

Henderson

New developments in the cur­rent reorganization of SohioChemicals and IndustrialProducts Company (SCIPCO)include appointment of fivenew vice-presidents.

Two of the appointments arein the newly established Engi­neered Products business,completing the managementteam.

They are:Thomas L. Henderson, Ad­

ministration and Control vice­president. Henderson most

Sohio Petroleum Company

line System (TAPS) for Sohioand the seven other TAPSowners.

Nelson succeeds Frank G.Turpin, Alyeska presidentsince 1978, who is retiring.

Nelson, who joined Sohioin 1958 in Cleveland, wasassigned to Alyeska in 1974 asAdministration vice-president.Since 1980, he has beenOperations vice-president,responsible for the dailyoperations of TAPS.

Nelson

George M. Nelson, a Sohioemployee on loan to AlyeskaPipeline Service Co., has beennamed president of Alyeska,effective Jan. 7.

Alyeska maintains andoperates the Trans Aiaska Pipe-

Alyeska gets new president

Robert L. Wilbanks transfersfrom San Francisco to the GulfCoast Division as DivisionFaci Iities manager.

At San Francisco: In Engineering,Martin H. Harris is promoted toReservoir Engineering manager.

WilbanksRitter

promoted to Records, Rentals,and Systems manager.

In Audit Management. S. LaneRitter is promoted to GeneralAudit manager- Exploration &Production.

In Accounting, Bobby J. Sloan,is promoted to Work in Progres,/Fixed Assets manager.

-Dildine Wagner

At Dallas: Steven M. Dildine ispromoted to Planning &Economics manager.

In Production, Frederic A.Wagner transfers from SohioAlaska Petroleum Company toDallas as Mid-Continent DivisionProduction manager.

At Houston: In Land Administra­tion & Records, C. E. Bodman is

Technology & Planning

Development Division, andRalph B. Ender as technicalassociate, moving from Corpor­ate Engineering.

Mary Ann O'Malley leavesSohio Chemical Company tobecome planning associate inTechnology Planning & Analysis.

engineer.

Other newcomers include D. P.Anderson, Project Productionmanager in Corporate Develop­ment; A. Baron, project leaderin Corporate Engineering; A. J.Belfer, senior Research &Development chemist inTechnology Support; Michael F.Esposito, patent attorney II inthe Patent & License Division;R. H. Rotondi, Project Marketingmanager in Corporate Develop­ment; and A. L. Tuno, researchchemist in Alternate EnergyDevelopment.

PatneskyMercer

Patnesky, information servicesspecialist; Robert G. Rolan,Ecology & Contingency Plansma nager; and Dale E. Strother,corporate staff toxicologist.

Beginning with Business Researchare T. L. Cable, project engi neer,and G. P. Ceasar, research

Esposito

Glenn Mercer transfers fromSohio Oil Company to StrategyDevelopment as senior corporateplanning associate.

Starting with Health, Safety &Environmental Quality arePatricia T. Horvath, corporatehealth coordinator; Theresa A.

\Horvath

>

O'Malley

At Cleveland: N. Bala Ganesanis appoi nted to the new post ofDownstream Coal Coordinationdirector. Joining the DownstreamCoal Coordination staff areWilliam D. Mooney as BusinessAnalysis manager, transferringfrom the Alternate Energy

RETIREMErtTSOffice of theChairmanMarguerite A. Barany (Nov. 1),secretary to the chairman,Cleveland. Employed 1944.

AdministrationAmparo M. Davis (Oct. 1),Constituent Communicationseditorial production assistant,Government & Public Affairs,Home Office. Employed 1966.

Technology &PlanningDonald L. GoUron (Aug. 1),Business Research technician,Cleveland's Warrensvi lieResearch & Development Center.Employed 1979Richard H. Jones (Oct. 1),engineering consultant, HomeOffice Corporate Engineering.Employed 1944

Sohio PetroleumCompanyRudy C. Berlin (Aug. 1),staff geophysicist, Houston.Employed 1983.Robert E. Huey (Oct. 1), flightreserve captain, Anchorage.Employed 1979.

Sohio Oil CompanyIn Refining, at Lima (Ohio)Refinery: Louis Forney (Oct. 1),insulator-painter. Employed 1949.James R. Hazell (Nov. 1),instrument technician.Employed 1949William R. Williams (Oct. 1),operations specialist-productflow. Employed 1951.

At Marcus Hook (Pa.) Refinery:Chester A. Bush (Nov. 1),maintenance supervisor.Employed 1948.

In Retail Marketing: Elwood E.Burns (Oct. 1), senior jobber salesrepresentative. Roanoke, Va.Employed 1949.Dola G. Caivano (Nov. 1),self-serve station manager, Kent.Ohio. Employed 1969Russell E. France (Dec. 1), dealersales representative, Cleveland.Employed 1946.Richard L. Jensen (June 1),service station sales repre­sentative, Cambridge, Ohio.Employed 1981.Louis J. Logar (Oct. 1), seniorself-serve station cashier, Lorain,Ohio. Employed 1955.Chester L. Lowe (Oct. 1), car carecenter manager, Ci ncinnati.Employed 1961Inabelle H. Mahan (Oct. 1),Gas & Go station assistant,Baltimore. Employed 1943.Thomas M. Musto (Oct. 1),car wash manager, Cleveland.Employed 1956.

Holland M. Nicewander (Oct. 1),self-serve station manager,Dayton, Ohio. Employed 1977Janet Noel (Oct. 1), servicestation supervisor, Portsmouth,Ohio Employed 1969Grace M. Rolf (Nov. 1), self-servestation cashier, Cincinnati.Employed 1977.

At Home Office: Genevieve M.Koch (Nov. 1), senior secretary,vice-president for Administration& Control. Employed 1944.Stephanie K. Michalewicz(Nov. 1), security controlclerk, Retail Marketing's dataprocessing. Employed 1971.

In Transportation: James D.Bennett (Oct. 1), port captain,Long Beach, Calif.Employed 1979.George A. Kuechle (Sept. 1),senior contract auditor, SohioPipe Line Company, Anchorage.Employed 1947.

In Wholesale Marketing &Distribution, at Mt. Union (Pa.)Terminal: Frederick J. Cook(Oct. 1), terminal superintendent.Employed 1960.Charles W. Walp (Oct. 1), terminaloperator. Employed 1948.

At Lorain (Ohio) Terminal:Vaddie Collins (Nov. 1), driver.Employed 1972.

Sohio Chemicals &Industrial ProductsCompanyWith Sohio Chemical Company:Joe R. Cotter (Oct. 1), NitrogenChemicals Division operatingsupervisor, Lima, Ohio.Employed 1950.Lloyd W. Phillips (Aug. 1),Soh igro ch ief operator, Rochelle,III. Employed 1979.

Sohio News· January 1985 9'

Sohio Oil Company

Holzer

At Cleveland: D. C. (Ron) Holzertransfers from the ClevelandData Center to Financial ControlSystems to become Systemsmanager.

Robert B. Parmenter moves fromInsurance & Risk Management toFinancial Planning and i.s namedFinance Projects manager.Starting as Corporate Tax Planningmanager is F. N. Fritz; and astax attorneys I, C. J. Pinciottiand Donald W. Stevenson.

Finance & ControlWholesale Marketing & Distribu­tion as project engineer III;and B. F. Vaughan from MarcusHook (Pa.) Refinery to EconomicEvaluation as project evaluationanalyst.

Starting in Retail Marketing'sSystem Information Services areN. l. Gardner as project leaderand R. B. Witt as Planningmanager.

J. G. Dzwonczyk joins Construc­tion & Engineering Administra­tion as construction engineer.

At Lima, Ohio: Robert O. Selltransfers from Sohio ChemicalCompany to Lima Refinery ascontrol laboratory supervisor.

Pauline Ramig moves fromPetroleum Products & Refining toCrude Trading & Transportationto joi n the Eastern Crude Oi IDivision as Analysis & Controlmanager.

Transferring to Truckstop Admin­istration from Truckstops ofAmerica at Nashville, Tenn., areFrederick A. Alvarez as FleetSales manager; Patrick H. Fanelli,Restaurant Marketing specialist;and Ivan W. Wagner, RestaurantMarketing manager.

Other transfers include A. E.McCarthy from Sohio Con­struction Company to Retai IMarketing's Pricing as engineer­ing intern; Elaine A. Petkovsekfrom Corporate Engineering to

...... - .Hedman Ramig

At Cleveland: Kent S. Hedman,Retail Marketing controller, isappointed to the new post ofExecutive Coordination managerto manage the flow of work andprovide administrative andanalytical assistance to FrankJ. Mosier, Sohio senior vice-presi­dent and Soh io Oi I president.

Blair named VP

Glenn M. Blair is appointedto the new post of HumanResources vice-presidentfor Sohio Oil Company.

Blair most recently wasHuman Resources vice­president for SohioChemicals and IndustrialProducts Company.

Li nderoth

Wayne l. Stewart starts asCentral Shop manager.

At Meadow Lands, Pa.: James G.Goroncy is promoted to coalfield engineer III.

At Oakland City, Ind.: David M.Young joins as Administrationdirector.

transfers from Mine 26 to Mine 24and is promoted to longwallcoord inator.

Old Ben Coal CompanyAt Lexington, Ky.: Promotionsinclude Bernie M. Devine tochief pilot; Jay I. Jones to pilot;and Jeff W. linderoth toIntegrated Business Plans &Reports manager in BusinessDevelopment.

Jerry J. Oliver transfers fromAlternate Energy Developmentin Cleveland to assume the newpost of Special DevelopmentProjects director in Engineering.

Newcomers include R. Bessetteas Sales Engineering manager;Robert B. Gabbard, Coal Procure­ment manager in Marketing;William F. Musiol Jr., processengineer; Mike Musulin II, PublicAffairs director; and William B.Wells Jr., planning engineer.

At Benton, III.: Donald W. Smith

SeimVirtue

Recruitment manager, addingresponsibilities for UniversityRelations & Recruitment, previ­ously held by Brian R. Enos wholeft the company.

Robert D. Virtue is appointedExecutive Compensation man­ager, moving from Sohio Chem­icals and Industrial ProductsCompany. Starting with HumanResources administration isDouglas R. Seim as HumanResources associate.

Miller

to the new post of Operations &Support Services manager.Starting in Commercial TechnicalSupport are R. V. Olson, seniorconfiguration planning specialist,and S. M. Synek, systems soft­ware specialist. P. l. Spoff joinsData Center Security as datamanagement specialist.

In Corporate Human Resources,Edward R. Miller, ExecutiveRecruitment manager, assumesthe new poscof Professional

Administration

Hangosky

At Cleveland: David J. Hangoskyis appointed Relocation/Furni­ture, Furnishings & Equipmentmanager for Sohio's Clevelandheadquarters building project.He replaces William P. Chandlerwho left the company.

Clifford E. Banner joins CorporateInformation Systems as seniorinformation systems consultant.

At the Cleveland Data Center:David W. Braun Jr. is promoted

Kennecott

I" MEMORIAM

Wilhelm

At Salt Lake City: George l.Wilhelm starts in the new post ofMine Development director,responsible for the evaluationand development of new mineralventures.

Terry D. Vandell is named chiefwater resources engineer in

EmployeesAnthony l. Madama, 59, ThePfaudler Company, Rochester,N.V. Employed 1951.Elizabeth M. Spickard, 56, Truck­stops of America, Roanoke, Va.Employed 1981.Penny E. Vinson, 43, SohioPetroleum Company, SanFrancisco. Employed 1978.George W. Walker, 40, Old BenCoal Company. Employed 1976.Henry S. Wilson Jr., 66, Akron(Ohio) Marketing Employed1958.

Environmental Affairs, andRandy K. Vranes mining engineerin Engineering/Construction.

Harry M. Conger IV moves fromUtah Copper Division as Com­petitor Analysis supervisor inPlanning.

Promotions in the Utah CopperDivision include Gary J. Goldbergto planning engineer; Richard W.Seguin, Employee Relationsmanager-Concentrator Plant;C. Dale Sharp, Employee Rela­tions manager-Mines Plant;J. Robert Shields, Personnel &Employee Relations manager;Jeffrey D. Tygesen, senior miningengineer; and Stephen P.

RetireesMildred M. Brooks, 88, HomeOffice Accounting. Retired 1955.Joseph W. Farrell, 66, MarcusHook (Pa) Refinery. Retired 1980.Harry D. Frazier, 82, Toledo(Ohio) Refinery. Retired 1962.ElbertO. Galbreath, 67 ,ClevelandMarketing. Retired 1978.Anthony N. Garzia, 62, MarcusHook (Pa.) Refinery. Retired 1981.Jean E. Gensler, 65, Home OfficeAccounti ng. Reti red 1976.James J. Hines, 69, Marcus Hook(Pa.) Refinery. Retired 1979.Fred Hogue, 94, Old Ben CoalCompany, Benton, III. Retired1957Joseph l. leek, 77, Marcus Hook(Pa.) Refinery Retired 1972.

Winkelmann, Mine Servicessuperi ntendent.

At Hurley, N. Mex.: Joe A.Andazola is named Plant Safety& Security supervisor forChino Mines Company.

At Hayden, Ariz.: Promotions atRay Mines Division includeBurley T. Odell to Shop Supportgeneral foreman-Mines Plant;Mabern Meadows, GeneralAccounting manager; andMarcus E. Rawlins, SystemsAnalysis supervisor.

Arthur J. Maschke, 65, ClevelandMarketing. Retired 1977.Conley J. Moore, 74, Sohio PipeLine Company, Houston. Retired1975.John Pasternak, 64, Marcus Hook(Pa.) Refinery. Retired 1983.Glenwood G. Pickering, 72,Dayton (Ohio) Marketing.Retired 1974.Thomas P. Spring, 79, ClevelandMarketing. Retired 1963.Warren H. Thomas, 84, Canton(Ohio) Marketing. Retired 1963.leo F. Trefzger, 71, Home OfficeMarketing. Retired 1978.Calvin Williams, 81, ClevelandMarketing. Retired 1966.Agnes S. Wood, 68, BP Marketing,Atlanta, Ga. Retired 1972.

Traffic accident killsSat Prudhoe BayFive oil field workers on Alaska's North Slope,including four Sohio employees, were killed earlyNew Year's Day in a traffic accident on the mainroad on the Sohio side of Prudhoe Bay Field.

Three other Sohio employees were hospitalizedwith serious injuries.

The accident is the worst involving loss of lifeever to occur at Prudhoe Bay. It happened at6:30 A.M. when a large tractor-trailer truck jack­knifed and struck a passenger van carrying theSohio employees.

Killed were Sohio North Slope ProductionDepartment employees Sidney Ashby, 41; Lloyd W.Marston, 42; Mark H. Smoot Jr., 33; and Joseph c.Stahl, 41. A Purcell Security employee who wasdriving the van, officer John All ison, also was ki lied.The driver of the truck suffered minor injuries.

Kenneth J. Callen, B. J. Thomas, and DomenickN. Tota-the injured Sohio North Slope ProductionDepartment employees-were evacuated by jetto an Anchorage hospital for treatment. No otherswere in the van.

The Sohio employees were on their way fromthe Sohio headquarters camp to Gathering CenterNo.2, where they were scheduled to relieve theovernight crew at 7 A.M.

Purcell Security is responsible, among otherthings, for transporting Sohio employees to andfrom their job sites.

The North Slope Borough Department of PublicSafety and the Alaska State Troopers are investi­gating the accident.

10 Sohio News· January 1985

Greek tanker Corinthos ablaze at Marcus Hook (Pa.) dock in 1975.

Sohio, BPmark is-yearanniversaryJan. 1, 1985, marked the 15thanniversary of the agreementbetween Sohio and The BritishPetroleum Company p.l.e. thatprovided Sohio with its vastcrude oil reserves on Alaska'sNorth Slope and a major interestin the Trans Alaska PipelineSystem (TAPS).

Under the agreement, BPcould attain a 53-percentstock interest in Sohio basedon rising production rates fromthe Prudhoe Bay Field. BPachieved that ownership interestin 1979, the year field pro­duction reached the maximumefficient rate of 1.5 mill ionbarrels a day. (BP's interestincreased to 55 percent last yearwhen Sohio bought 11 millionshares, reducing the total sharespublicly held.)

Sohio today owns more than50 percent of the Prudhoe BayField crude oil reserves, and hasa 33'/3-percent interest in TAPS.

20 yearsago ... ln 1965, Sohioadopted its Matching Gift

program enabling eligible employeesto contribute $25 to $2,000 percalendar year to qualified collegesand universities and have theirdonations matched by the company.

Sohio's satellite tracking station nearCleveland-the first privately ownedfacility of its kind-was presented toOhio University at Athens, Ohio. The$200,000 station was established in1958 and recorded signals fromExplorer I, the United States' firstartificial satellite.

Sohio got involved in the projectwhen a group of scientists at thecompany's Warrensville Research &Development Center requestedfinancial assistance, and space inwhich to work at the Center. Thescientists built much of the satellitetracking equipment and operatedthe station in their off-work hours.

15 years ago ... ln June 1970, a$75-million expansion of

Sohio's Lima (Ohio) Refinery was infull operation, two weeks ahead ofschedule. The expansion boostedcrude oil processing capacity from60,000 barrels a day to 130,000, andincluded provisions for a furtherincrease to 150,000 barrels a day.

In late 1970, Alyeska Pipeline ServiceCompany was formed to build andoperate the Trans Alaska PipelineSystem (TAPS) for Sohio and sevenother owner companies. The name"Alyeska" comes from a word us..ed byearly natives of Alaska in describingtheir country as a "great land."

10 years ago . .. Quick completionof an emergency pipeline

between Sohio's Marcus Hook (Pa.)Refinery and a nearby Sun Oil Co.dock kept the refinery in operationafter a fire and explosion on Jan. 31,

1975, destroyed its dock on theDelaware River. The Greek tankerSS Corinthos was unloading crude oilat Marcus Hook, near Philadelphia,when it was rammed by an Americantanker which had just left a chemicalfaci Iity across the ri ver from therefinery. The explosions and firedestroyed the Corinthos and therefi nery dock, and ki lied 30 peopleaboard the Greek ship. Three refineryemployees were treated for minorinjuries.

In 1975, Soh io awarded contracts ofmore. than $400 million to AvondaleShipyards, Inc. of New Orleans tobuild six tankers to transport Alaskancrude oil to the West Coast and otherU.S. ports. Each ship could carry up to1.2 million barrels of crude oi I and wasdesigned to exceed U.S. and inter­national standards for safety andpoll ution control.

Put River No.1, BP's first oildiscovery well at Alaska'sPrudhoe Bay in 1969, helpedconfirm field reserves.

SAL UTE

Hamm helps team in jamSohio News salutes Ron Hamm, whose effortshelped win Pike Central High School's cross­country track team a first-place conferencetrophy.

When a tax referendum was voted down andthe original coach left, Hamm volunteered tocoach the school's varsity team.

An overburden blaster at Old Ben CoalCompany's No.2 Mine in Oakland City, Ind.,Hamm started running about five years ago.

"I'm happy to have been a help to the team,"he says. "Its appreciation is more than enough

. repayment for me. The fact that we won madeit all the better."

. ~~~~rdfl {':J• -..J' ,I I... .-- -- --

Managing Editor:June Eppink

Staff:Bernie ButtlerArgia CollinsJim KosowskiMarcia Meermans

Sohio News is published for employees andretirees of The Standard Oil Company (Ohio)and its subsidiaries.

All contents copyright ©1985, The StandardOil Company (Ohio).

For permission to reprint or adapt editorialmatter, address correspondence to June Eppink,Government & Public Affairs Department,The Standard Oil Company (Ohio),1762 Guildhall Building, Cleveland, Ohio 44115.Phone: (216) 575-5568.

Sohio is an equal employment opportunity/affirmative action employer.