Raising the Stakes

ARCO ups Alaska five-year capital budget from $1.7 billion to $2.5 billion; amount could increase if oil and gas leasing is resumed in NPR-A

Kay Cashman, Gary Park and Allen Baker

PNA Editor-in-Chief

ARCO Alaska Inc. said March 17 that it expects to spend $2.5 billion on oil field development and exploration projects in Alaska over the next five years, an $800 million, or 47 percent, increase over the company's 1997 five-year budget of $1.7 billion.

Low oil prices not a factor

Low oil prices are not likely to impact the new five-year budget, Kevin O. Meyers, ARCO Alaska's new president and chief operating officer, told PNA.

"We're obviously very concerned about the price of oil. We hope that the current downturn is a short one. ... The oil business, however, is very cyclical," said Meyers.

In 1994 ARCO, he said, "positioned" itself to weather fluctuations in oil prices by reducing its costs. "We know this is a cyclical business, so we are prepared for it," Meyers said. "We look at the entire package in Alaska — the new technology ... good relations with the state, and come up with a mix that gives us confidence to keep investing even when prices are

low." ...

The rest of this story is available from Petroleum News • Alaska by calling the circulation manager Dan Wilcox at 522-9469 for back issue copies. (March 1998)