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Chevron Corp. said it plans to spend $21.6 billion on its capital and exploratory program for 2010, including $4.1 billion in the United States. Spending overall is set to decline by 5% from projected 2009 spending. Earlier this month ConocoPhillips said it would reduce 2010 North American spending in 2010 by 10% from this year (see NGI, Dec. 7). Global upstream spending for 2010 totals $17.3 billion, Chevron said. Included in the plan is $1.6 billion of expenditures by affiliates, which do not require cash outlays by the producer's consolidated companies. About 80% of the coming year's spending will be directed at upstream natural gas and oil exploration and production (E&P) worldwide. Another 16% is going to downstream businesses. Major E&P projects in the United States are to include deepwater exploration and development projects in the Gulf of Mexico, which include Jack-St. Malo, Perdido, Tahiti, Tonga and Big Foot. In Canada the Athabasca oilsands are on the list for expansion.

Apache Canada Ltd. has agreed to appraise and potentially develop promising natural gas and oil resources in southern New Brunswick under a farmout and option contract with junior explorer Corridor Resources Inc. Under the agreement, Apache would spend up to C$25 million over 18 months to evaluate the commercial potential of natural gas development in the Frederick Brook Shale formation and light oil development at the Caledonia oil discovery. Apache would test the acreage using seismic, drilling or fracturing and complete/abandon one or more vertical gas, oil and/or shale gas wells. When the appraisal is completed, which is expected by June 1, 2011, Apache would earn a half stake in the spacing units drilled, Corridor said. Apache also would have the option to drill more test wells and to construct a 20-kilometer natural gas pipeline from the Elgin area that connects to Corridor's natural gas plant at the McCully Field. Once the farmout agreement is completed, Apache would have a 50% working interest in the 116,000 net acres that Corridor (100%) currently holds in the farmout area. Corridor would pay half of any other activities conducted on the farmout lands, it said.

ExxonMobil Production Co. has resumed drilling on two wells started earlier this year at Point Thomson on Alaska's North Slope and is on schedule to reach total depth by year-end 2010, the company said. The company drilled each of the wells, PTU-15 and PTU-16, to approximately 5,000 feet during the summer, as deep as possible during the ice-free season. Drilling into deeper formations is permitted only from Nov. 1 through April 15. This season's drilling program follows a summer work program that delivered more than 30,000 tons of fuel, equipment and supplies in 120 barge runs from the Prudhoe Bay West Dock, some 60 miles west of the Point Thomson drilling site, the company said. "We are making real progress at Point Thomson and are on schedule to start production in 2014," said Dale Pittman, Alaska production manager for ExxonMobil. The project is expected to process 200 MMcf/d of gas in order to produce approximately 10,000 b/d of liquid condensate into the Trans Alaska Pipeline System, with capacity for up to 10,000 additional b/d of oil. After processing, the gas will be recycled into the reservoir, making Point Thomson the highest-pressure gas cycling operation in the world, ExxonMobil said.

Looking to expand its oil and natural gas field services operations in Western Canada while gaining a foothold in Alaska, Calgary-based Total Energy Services Inc. has agreed to acquire the drilling services, rental and transportation business currently operated by DC Energy Services Inc. for C$44.5 million (US$42 million), the company said last week. Privately owned DC Energy is active throughout western and northern Canada and Alaska through seven primary locations and several satellite locations, employing about 135 people. The assets to be acquired are complementary to Total Energy's existing equipment fleet and include approximately 3,600 pieces of rental equipment, 20 heavy trucks and 59 trailers, together with all inventories and other assets (excluding only land and buildings) used in connection with DC Energy's business. Total Energy said it will offer employment to "substantially all" of DC Energy's employees. Through its operating subsidiary, Total Energy currently owns and operates approximately 4,500 pieces of rental equipment, 74 heavy trucks and 131 trailers. As such, the acquisition represents an approximate 80% increase to Total Energy's rental equipment fleet and a 27% increase to its heavy truck fleet. Of the purchase price, C$32 million (US$30.2 million) is to be paid in cash at closing, with C$12.5 million (US$11.8 million) to be paid through the issuance of convertible unsecured debentures of Total Energy. The deal is expected to close on Jan. 15 with an effective date of Jan. 1.

Two western firms with some complementary biomass power producing technology announced that they have received a $23 million U.S. Department of Energy (DOE) grant for a demonstration project in Colorado. Los Angeles-based Rentech Inc. and Hawaii-based ClearFuels Technology Inc. will jointly build a biomass gasifier at Rentech's Energy Technology Center in Denver. The grant, which is subject to final negotiations with DOE, is for one of 19 biorefinery projects selected by DOE under the American Recovery and Reinvestment Act. Under the grant, the firms will manufacture and install at the Denver technology center a 20-ton/day ClearFuels biomass gasifier that is designed to produce synthetic gas (syngas) from sugar cane bagasse, virgin wood waste and other cellulosic feedstocks. The gasifier will be integrated with Rentech's existing Product Demonstration Unit (PDU) for production of renewable synthetic fuels from biomass.

Union Pacific Railroad's Pipeline Express -- which serves the steel pipeline industry by delivering product for oil and gas producers -- has delivered its 25,000th rail car of pipeline product, the railroad said. Formed in 2005, Pipeline Express has grown from moving approximately 1,700 rail cars in its first year to nearly 8,000 through year-end 2008. Union Pacific said its rail network "aligns well geographically with new pipeline projects." Natural gas reserves are expected to grow 39% from 2007 levels by the end of 2009, Union Pacific said, citing Energy Information Administration data. The railroad said it has invested nearly $17 billion in its rail network since 2005. "We have the industry's largest fleet of 89-foot flat cars capable of hauling 100 tons of pipe," said Greg Shimonek, senior business director for the railroad's Pipeline Express service. Union Pacific links 23 states in the western two-thirds of the country.

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