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Phillips Petroleum capital budget up 2 percent; Alaska share down Alaska capital projects include 10 exploration wells; millennium class tankers; facility expansion at Alpine; Kuparuk and Prudhoe Bay satellite development By Petroleum News • Alaska
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.
Overall, the company's exploration and production budgets, $2.6 billion for 2002 and $2.55 billion for 2001, rose 2 percent. Where the money is going changed, with exploration dollars dropping 47 percent to $238 million (from $446 million in 2001) and production gaining 12 percent to $2.6 billion (from $2.55 billion in 2001), with foreign production gaining the most, up 49 percent to $2.4 billion from $2.1 billion in 2001.
International competition Phillips said Dec. 11 when it released the capital budget that the larger capital program reflects increased spending on development of legacy exploration and production assets in Venezuela, China and the Timor Sea and a full year of funding for downstream projects acquired in the September 2001 acquisition of Tosco Corp.
“The Alaska projects have to measure up against Phillips’ worldwide projects. Where money will be spent comes down to economics,” Phillips Alaska Inc. spokeswoman Dawn Patience told PNA.
The capital budget is split 74 percent to exploration and production, 24 percent to refining, marketing and transportation and 2 percent for general corporate purposes.
Fewer wells 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, nine in 2000 and six in 1999.
“This past year was an exceptional year for exploration,” Patience said.
Phillips said that Alaska wells in 2002 will be in the National Petroleum Reserve-Alaska and on the North Slope.
Phillips Petroleum spokeswoman Kristi DesJarlais told PNA the difference in 2001 and 2002 production capital spending is largely due to the investments Phillips made this past year in developing the Alpine and Meltwater fields.
“Another difference between last year and this year is the acquisition of addition interest in TAPS that is reflected in 2001,” she said.
Of the capital production budget, 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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