TOKYO (AP) _ Cosmo Oil Co., a major Japanese refiner and distributor, will cut 40 percent of its work force and reduce about 20 percent of its assets under a four-year restructuring program.

``The drastic steps will be taken to beef up cost-performance and remain competitive,'' Cosmo Oil spokesman Hozumi Tokita said Friday.

Prices of gasoline and other oil products in Japan have fallen sharply in recent years, especially since the liberalization of gasoline imports in April 1996.

Under the restructuring plan, Cosmo's payroll will be gradually reduced to 1,500 from the current total of 2,700 by March 2003. Its assets will be trimmed by $1.8 billion by the same date.

Tokita said the asset-reduction will be made through various measures, including the sale of real estate, the securitization of various assets and integration of related plants.

Cosmo, Japan's third-largest oil distributor after Nippon Oil Co. and Idemitsu Kosan Co., has current assets of about $10 billion.