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$1.4B capex for Alaska from BP, Conoco Conoco shows ‘modest’ increase from ’05; BP funds down, but with less to tankers, TAPS reconfig and more to North Slope Kristen Nelson Petroleum News Editor-in-Chief
Both ConocoPhillips and BP have released their 2006 capital budgets for Alaska, and ConocoPhillips plans to spend some $60 million more this year than last, BP some $100 million less.
BP’s capital spend plan for Alaska for 2006 is $600 million, BP Exploration (Alaska) spokesman Daren Beaudo told Petroleum News Dec. 12, “with in excess of $1 billion expected” for operations and maintenance.
ConocoPhillips said in a Dec. 9 statement that Alaska exploration and production capital expenditures are expected to be approximately $800 million, “primarily directed toward the development of the Alpine satellites and the West Sak heavy oil field, as well as continued development within the existing Prudhoe Bay and Kuparuk areas.”
ConocoPhillips Alaska spokeswoman Dawn Patience said the capital also includes tankers and exploration. She said the estimate for the capital that will be spent in 2005 is $740 million, “with another $1 billion dedicated to operating and maintaining our existing Alaska assets.”
The $800 million budgeted for 2006 is a “modest” increase from the $740 million estimated actual spend in 2005, Patience said. She said the company has not released its operating and maintenance budget for 2006.
ConocoPhillips had budgeted $700 million for capital for 2005 and $900 million for operations in Alaska, a total of $1.6 billion, compared to $1.74 billion actually spent. ConocoPhillips operates and is a major owner in the Kuparuk River and Alpine fields on the North Slope, as well as being one of three major owners at Prudhoe Bay. In Cook Inlet it operates the Beluga and North Cook Inlet gas fields. BP will spend more on the slope Although BP’s $600 million capital budget for Alaska is down from $700 million in 2005, Beaudo said more of the budget is going to the slope in 2006. The biggest part of the difference between the 2005 and 2006 amounts, he said, was money for tankers and trans-Alaska pipeline reconfiguration costs in 2005. He said the Alaska capital budget had gone up “because of the roughly $250 million annually for tanker spend plus reconfiguration costs.”
Beaudo said BP doesn’t have a final total on its 2005 capital spend in Alaska, but more than $1 billion has been spent on operations and maintenance during the year. The 2005 budget for operations and maintenance was $800 million.
Beaudo said the $600 million budgeted for 2006 includes $161 million for tankers.
The $1 billion in operations and maintenance includes more than just running existing operations, he said. Also included in the amount is infrastructure renewal, “improving our facilities to handle current and future production needs” for the 50 year future BP sees in Alaska and “lots of well work.”
“We’re looking at $13 billion in capital investment over the next decade,” Beaudo said, including the gas pipeline.
BP operates Prudhoe Bay and associated fields on Alaska’s North Slope for itself and the other working interest owners. BP, ConocoPhillips and ExxonMobil are the majority owners in the Prudhoe Bay area fields. BP also operates the Badami, Endicott and Milne Point fields, and is a major owner in the Kuparuk River field. Overall ConocoPhillips budget $10.5 billion ConocoPhillips’ overall budget includes cash capital expenditures of some $10 billion, along with $500 million of capitalized interest and minority interest for a total authorized 2006 capital budget of $10.5 billion.
This budget was announced Dec. 9, prior to ConocoPhillips’ Dec. 12 acquisition of Burlington Resources (see story in this issue).
Jim Mulva, the company’s chairman and chief executive officer, said the 2006 capital budget “underscores our commitment to maintain cost and capital discipline, while aggressively reinvesting in our business to grow our capability to deliver energy to the world.”
“We have a pipeline of large projects and favorable investment opportunities on the horizon that will allow us to strengthen our position worldwide and provide long-term value for our shareholders.”
The company said 63 percent of its 2006 cash capital budget will be allocated to exploration and production, 35 percent to refining and marketing and the remaining to emerging businesses and corporate segments.
The exploration and production 2006 cash budget is approximately $6.3 billion, with about $1.8 billion going to projects in the North Sea and West Africa and $1 billion to Asia Pacific projects.
The U.S. Lower 48 and Latin America are budgeted for some $900 million, Alaska and Canada each $800 million. Canadian projects include Syncrude expansion and Surmont heavy oil development, as well as continued work on the Mackenzie Delta gas pipeline.
Russia and the Caspian are budgeted for $700 million, the Middle East and North Africa $100 million and $200 million on the company’s global gas business for ongoing development of regasification facilities in the United States and to meet a growing need for natural gas supplies.
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