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ConocoPhillips OKs $6.9 billion 2005 capex budget Capital and exploration spending in Canada will be up $300 million; Alaska North Slope increase is $100 million Kay Cashman Petroleum News Publisher & Managing Editor
ConocoPhillips board of directors said Dec. 10 that it has approved 2005 cash capital expenditures of approximately $6.9 billion. This total excludes approximately $300 million in capitalized interest and $200 million in minority interest.
“Two-thirds of our 2005 capital program is focused on payout projects, those that will build on our strengths and advantaged positions in certain areas of the world to even further improve returns to our shareholders,” said Jim Mulva, chairman and chief executive officer. 75% of capex to E&P projects, midstream The company will allocate approximately 75 percent of its 2005 capital budget to its exploration and production and midstream segments. Refining and marketing will receive about 22 percent of the budget. The remaining budget will be allocated to emerging businesses and corporate.
E&P’s 2005 capital budget is approximately $5.1 billion, excluding capitalized interest and minority interest related to the Bayu-Undan project in the Timor Sea. Approximately $500 million budgeted for worldwide exploration activities is included in the regional totals that follow.
Approximately $1.4 billion of the E&P budget is allocated toward projects in the North Sea and West Africa.
ConocoPhillips said E&P anticipates spending approximately $900 million in the development of projects in the Asia Pacific region. The majority of these funds will go toward continued development of the Bayu-Undan project in the Timor Sea, oil and gas reserves in the offshore Block B and onshore South Sumatra blocks in Indonesia, and the second phase of Bohai Bay in China.
The company has allocated roughly $900 million of the E&P budget to developments in the U.S. Lower 48 and Latin America. The focus in these areas will be on ongoing development programs in Lobo and San Juan in the Lower 48, as well as the development of the offshore Corocoro field and the Plataforma Deltana project, both in Venezuela. Alpine satellites not sanctioned — yet The company intends to spend approximately $700 million of the E&P budget for its Alaska operations – up $100 million from 2004. (A total of $1.6 billion will be spent in Alaska in 2005, including $900 million in operations.)
Alaska E&P projects include the development of the Alpine satellites and the West Sak heavy oil field, but ConocoPhillips Alaska spokeswoman Dawn Patience told Petroleum News Dec. 10 that the company is still reviewing the U.S. Army Corps of Engineers record of decision on the Alpine satellites received Dec. 6 and will not be sanctioning satellite work until that review is complete. She also said ConocoPhillips will be drilling four exploration wells on the North Slope this winter – two wildcat wells and two appraisal wells. Focus on western Canada, Mackenzie In Canada, E&P capital expenditures are expected to be about $700 million – up $300 million from 2004 – “with a focus on ongoing development programs in Western Canada, Syncrude expansion, Surmont heavy oil development, and continued work on the Mackenzie Delta gas pipeline,” the company said. ConocoPhillips allocated roughly $400 million for projects in the Russia and Caspian region, primarily for continued development of the Kashagan field in the Caspian Sea and for the Timan-Pechora joint venture in northern Russia.
E&P estimates it will spend approximately $100 million in the Middle East and North Africa.
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