ConocoPhillips 2010 spending cut 10 percent

ConocoPhillips said its 2010 capital program will come in at $11.2 billion, a 10 percent decrease from the estimated 2009 expenditures. That’s a bit of an improvement over the previous announcement of a 12 percent capex budget.
About 86 percent of the spending will be in E&P, 12 percent in refining and marketing.

“Our planned 2010 capital program will advance existing exploration and production projects, while preserving the potential to develop the company’s large resource position in the future,” said Chairman and CEO James Mulva. “We intend to achieve our objectives of organically replacing reserves and increasing our upstream production from a reduced, more strategic asset base, consistent with our recently announced portfolio optimization plan.

Conoco also added an “S” to Larry Archibald’s title, turning the “vice president Exploration” into “senior vice president, Exploration and Business Development.”
“In this expanded role, he will assume responsibilities for Exploration and Production global business development in addition to his current exploration responsibilities,” the company said in a release.
But back to the 2010 budget. A few data points:

• E&P’s $9.7 billion includes capitalized interest of $0.5 billion and $0.7 billion for the company’s contributions to the FCCL business venture (Canadian oil sands) and loans to other affiliates, as well as about $1.4 billion for worldwide exploration.

• $4.1 billion is for North America. In the U.S. Lower 48 funding priorities are “assets that offer the highest potential returns” including existing developments in the San Juan and Permian basins and the Bakken, Lobo and Barnett trends.

• Canada spending will focus on existing oil sands projects and selective programs in the Western Canada gas basins.

• Alaska spending is expected to be directed toward development of the existing Prudhoe Bay and Kuparuk fields, as well as the Alpine field and satellites on the Western North Slope.

• Europe, Asia, Africa and the Middle East E&P spending will be about $5.6 billion.

• In Asia Pacific the focus is development of coalbed methane projects in the APLNG joint venture, continued development of Bohai Bay in China, new fields offshore Malaysia, offshore Block B and onshore South Sumatra in Indonesia, and offshore Vietnam.

• Middle East and Africa spending will be primarily directed toward the Qatargas 3 project and onshore developments in Nigeria, Algeria and Libya.

• Spending in the Russia and Caspian Sea region will primarily support continued development of the Kashagan field in the Caspian Sea.

• Spending on wildcat wells will be directed to the Deepwater Gulf of Mexico, Australia’s Browse Basin, Kazakhstan’s Block N, Canada’s East Coast, offshore Indonesia and the North Sea.

• The company also plans to progress exploration drilling in the Eagle Ford shale position in the U.S. Lower 48, a coal seam gas play in China, and a shale gas play in Poland.

• The $1.3 billon for refining and marketing include $0.9 billion for U.S. downstream and $0.4 billion for International R&M.

• About $0.2 billion will go to “emerging business,” including the second phase of an expansion project at the company’s Immingham Combined Heat and Power plant in the United Kingdom.

All part of the plan as outlined in this item about The Mind of Mulva.

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