In Phillips' exploration cuts, Alaska fares better than other areas
Phillips’ Alaska exploration budget is $41 million next year, down from $68 million this year. Total exploration by Phillips is being reduced from $446 million this year to $208 million next year, the board announced. This will result in 10 new wells being drilled in 2002, down from the 15 being drilled this winter.
Phillips’ overall capital spending in Alaska is also reduced next year, from $942 million this year to $807 million next year. Capital spending related to production will be $766 million next year, compared with $874 million this year.
The company’s budget for Alaska next year also includes ongoing expenditures on new millennium-class tankers to carry North Slope oil to market.
Phillips’ board of directors approved overall capital spending of $3.5 billion for 2002, up from $3.1 billion for in 2001.
Besides the tankers, Phillips’ 2002 capital expenditures include development of Meltwater, Palm, West Sak and other new developments, as well as ongoing development of the Borealis satellite field in Prudhoe Bay.
Phillips is also investing heavily in international projects, including the Bayu-Undan project and gas recycling project in the Timor Sea, the Hamaca heavy-oil development in Venezuela, and the Bohai Bay development in China.
The company will undertake projects in the Jade field in the British sector of the North Sea and further development of the Ekofisk and Eldfisk fields in the Norwegian sector.
Forty-three percent of Phillips’ capital spending in exploration and production will be spent domestically, with 72 percent of that planned for Alaska. However, only 31 percent of the company’s worldwide exploration budget will be spent domestically, with about half of that planned for Alaska.
Foreign exploration budgets are also being cut. In the current year, Phillips is spending $348 million for exploration outside the United States. That will be reduced to $165 million in 2002.