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NEWS BULLETIN

January 23, 2003 --- Vol. 9, No. 7January 2003

BP’s 2003 capital budget up slightly from last year

BP Exploration (Alaska) Inc. will spend $750 million in Alaska in 2003, up $25 million from what was budgeted for 2002 and up $110 million from what was actually spent in 2002.

Company spokesman Daren Beaudo told Petroleum News Alaska in mid-January that “spending in 2003 is flat or slightly above 2002 budget figures. (I) don't have any specific reasons for the change.”

Roughly $500 million will be spent “for production activities and the balance for transportation — most notably $200 million for construction of the Alaska Class tanker,” Beaudo said.

The “biggest difference” between what BP budgeted in 2002, $725 million, and what was spent, $640 million, was due to the company deferring some of the $100 million ship’s expenditure, he said.

Unocal cuts Alaska capital spending to 2000 levels

Unocal Alaska’s 2003 capital budget has been set at $35.5 million, the same amount the company spent in 2000, but half of what it spent in 2001 and 2002.

Unocal Alaska spokeswoman Roxanne Sinz told Petroleum News Alaska in mid-January that the company spent approximately $71.8 million in 2002 and $81.3 million in 2001. In an interview a year ago, Unocal Alaska’s chief executive Chuck Pierce said the company’s capital expenditures in 2000 totaled $35 million.

Sinz said the 2003 “budget cuts have not affected” Unocal’s North Slope plans. “We are continuing to seek out investment opportunities and will fund when appropriate.”

Devon teams up with Shell Canada to drill Mackenzie Delta

Devon Energy Corp. and Shell Canada Ltd. have formed a new partnership to drill a natural gas exploration well on the Mackenzie Delta, giving further impetus to the pace of activity in the Canadian Arctic this winter.

Devon announced today that it owns a 40 percent interest and will operate the Itiginkpak F-29 well, about 17 miles northwest of Inuvik in the Northwest Territories.

Devon and Petro-Canada had already announced their intention to drill another Delta well, Nuna I-30, 56 miles northeast of Inuvik on Petro-Canada operated lands — one of three wells they drilled last winter.

The Devon-Shell Canada partnership involves partners in the two major Delta groups. Shell Canada is one of four companies in the Mackenzie Delta Producers Group, which is the driving force in developing plans to tap 5.8 trillion cubic feet of estimated marketable reserves and build a pipeline along the Mackenzie Valley.

Devon is one of seven members of the Mackenzie Delta Explorers Group, which is being heavily counted on to make new discoveries to support a possible one-third aboriginal equity stake in a Mackenzie Valley pipeline, or volumes of 400 million to 500 million cubic feet per day.

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