ConocoPhillips is proposing a $900 million capital budget for Alaska this year.
The Houston-based major spent $730 million in Alaska in 2010, according to annual filings released by the U.S. Securities and Exchange Commission on Feb. 24.
When it comes to the majors, capital budgets offer only a sense of what a company is planning for the year and rarely match up exactly, or even closely, with actual spending.
For instance, ConocoPhillips spent $730 million in Alaska in 2010, but budgeted $854 million for the year. For 2008, ConocoPhillips budgeted $1 billion, but spent $1.4 billion.
That said, the 2011 budget is higher than any proposed for Alaska in the past five years except 2008, a time of rising oil prices and a record-breaking Chukchi Sea lease sale.
ConocoPhillips said spending in Alaska “is expected to be directed toward development of the existing Prudhoe Bay and Kuparuk Fields, as well as the Western North Slope.”
The company did not drill any North Slope exploration wells this winter.
The budget number comes as lawmakers are considering ways to increase investment on the North Slope, including lowering taxes and promoting access to existing facilities.
“We expect ConocoPhillips Alaska’s 2011 capital budget spending to be basically flat from 2010,” ConocoPhillips spokeswoman Natalie Lowman told Petroleum News, noting that actual 2010 spending was the lowest since 2007. “The 2011 capital budget includes contingency funding if we are successful in getting improvements in State fiscal terms, and resolving permitting issues with Alpine satellites.”
Focusing on the Lower 48The budget suggests ConocoPhillips is focusing more on other domestic projects this year. The company is budgeting $3.3 billion for Lower 48 exploration and production projects, nearly double the $1.8 billion spent in 2010 and up from $2.6 billion in 2009.
ConocoPhillips is pursuing projects in the Eagle Ford shale in Texas, as well as liquids-rich plays in the Permian and Barnett fields in Texas and in the Bakken Shale in North Dakota. The company is also budgeting for ongoing development in the San Juan basin and for its share of the Marine Well Containment Co., an oil spill response project.
ConocoPhillips also plans to increase its spending internationally.
The company is budgeting $7.1 billion for overseas exploration and projection projects, up from $5.9 billion spent in 2010 and $5.4 billion spent in 2009.
Companywide, ConocoPhillips is proposing an $11.3 billion budget for exploration and production projects, up from $8.5 billion spent in 2010 and $8.9 billion spent in 2009.