ConocoPhillips on Tuesday approved a $6.9 billion capital budget for next year, with 78% allocated toward exploration and production (E&P), 19% for refining and marketing and the rest toward emerging businesses. About $2 billion total is earmarked for North American and Latin American projects.
“Maintaining a 2004 cash capital budget essentially equal to 2003 is part of our disciplined approach toward improving returns on capital employed,” said CEO Jim Mulva. “This capital program will enable us to maintain safe and reliable operations, develop our existing legacy projects, and provide growth opportunities for the future.”
E&P’s 2004 budget is approximately $4.5 billion, excluding capitalized interest and minority interest related to the company’s Bayu-Undan project in the Timor Sea. E&P expects to spend $1.3 billion to develop projects in the Asia-Pacific region. Most of these funds will go toward its Bayu-Undan liquids and gas recycling project in the Timor Sea, oil and gas reserves in the offshore Block B and onshore South Sumatra blocks in Indonesia and the second phase of Bohai Bay in China.
Another $1 billion of the E&P budget is allocated toward projects in Europe and Africa. Projects include expansion of the company’s legacy positions in both the United Kingdom and Norwegian sectors of the North Sea.
The company allocated roughly $0.9 billion to develop projects in the Lower 48 and Latin America. The focus in these regions will be on the continued development of the Magnolia field in the deepwater Gulf of Mexico, completion of the heavy-oil upgrader associated with the Hamaca project in Venezuela and development of the Corocoro field offshore Venezuela.
Conoco also plans to spend approximately $0.6 billion for its Alaska operations. Most of the capital spending will fund Prudhoe Bay, Kuparuk and western North Slope operations, as well as construction of Endeavour Class tankers to transport Alaska North Slope crude oil. In Canada, E&P capital expenditures are expected to be about $0.4 billion, with a focus on Syncrude expansion, Surmont heavy oil development and Mackenzie Delta gas development.
E&P estimates another $0.4 billion will be spent on projects in the Middle East, Russia and the Caspian region. Projects include the Kashagan field and the Baku-Tbilisi-Ceyhan pipeline in the Caspian region, and the Qatargas 3 liquefied natural gas facility in Qatar.
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