NEWS BULLETIN

December 11, 2001 --- Vol. 7, No. 153December 2001

Phillips Petroleum capital budget up 2 percent; Alaska share down

The board of directors of Phillips Petroleum Co. has approved $3.5 billion for capital projects in 2002, up from $3.1 billion for 2001.

Alaska's exploration and production capital budget did not see an increase. Instead, it has dropped more than 14 percent, to $807 million from $942 million in 2001.

The Alaska exploration budget is down almost 40 percent to $41 million, from the $68 million budgeted in 2001. The production capital budget for Alaska, $766 million, is down more than 12 percent from $874 million in 2001.

Phillips officials have said that fewer exploration wells are planned in Alaska in 2002: 10 compared to 15 in 2001. Phillips said that Alaska wells in 2002 will be in the National Petroleum Reserve-Alaska and on the North Slope.

Of the capital production budget, Phillips Alaska Inc. spokeswoman Dawn Patience told PNA, the company will spend about $200 million in 2002 on its millennium class tankers (four are under construction, one is already in service), and about $47 million on Alpine capacity expansion. Production at Alpine, where the facilities are rated for 80,000 barrels per day, reached a one-day high in November of 108,000 bpd, Patience said. A lot of tweaking has been done with the Alpine facilities already, she said, and the capacity expansion will be a way to look at expansion for Alpine satellites and other developments.

The rest of the capital production budget is primarily for satellite work, Patience said: Meltwater, Palm and West Sak at Kuparuk and Borealis at Prudhoe Bay.

Alaska capital projects account for 23 percent of Phillips' worldwide investment for next year, Patience said, with about 50 percent of the company's actual production worldwide coming from Alaska a year-to-date average for 2001 of 392,000 barrels per day.


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