Post-sell offs, Conocophillips looks once again at growth – Capex up by 21% as against industry average of 11%

Conocophillips has outlined its 2011 capital expenditure program of US $13.5 billion, which  represents a significant increase in Exploration and Production (E&P) segment expenditures as compared to the Company’s last year’s budgetary program. Jim Mulva, chairman and chief executive officer said that, “This year’s capital budget reflects our emphasis on building the upstream business”. 

Highlights:

• 21% increase in capital budget – from US $11.2 billion in 2010 to US $13.5 billion for 2011
• US $12 billion for E&P activities which takes about 90% of the total budget
• About US $1.2 billion for Refining and Marketing and US $0.3 billion for global information systems and corporate facilities

 E&P Goals:

·         Improve margins and capital efficiency

·         Deliver production growth

·         Continue to pursue high‐impact exploration

·         Ongoing improvement in safety and operational excellence

Core Focus

North America (Capital expenditure: $6 billion)

·         United States :  Building core areas in Eagle Ford, Bakken and North Barnett  and ongoing development in the San Juan Basin and the company’s contribution to the Marine Well Containment Company in the U.S

·         Canada : Focus on existing SAGD oil sands projects and selective programs in the Western Canada gas basins, primarily on high-graded resource plays and on maintaining a substantial position for future development

·         Alaska : Development of the existing Prudhoe Bay and Kuparuk Fields, as well as the Western North Slope

Europe, Asia Pacific and Africa (Capital expenditure: $6 billion)

·         Europe : Spending on existing and new opportunities in the Greater Ekofisk Area, the Greater Britannia Fields, various Southern North Sea assets, and the development of the Jasmine and Clair Ridge projects

·         Asia Pacific : Further development of the coalbed methane-to-LNG project associated with the Australia Pacific LNG joint venture, as well as for the development of new fields offshore Malaysia, Indonesia, and offshore Vietnam

·         Africa : Onshore developments in Nigeria, Algeria and Libya and continued development of the Kashagan Field in the Caspian Sea region

Jim Mulva also said that, “This year’s capital budget reflects our emphasis on building the upstream business," said Jim Mulva, chairman and chief executive officer. "We expect competitive returns from our increased investments in North American and Australian unconventional resource projects. In addition, we are pursuing organic reserve and production growth by converting our existing resource base to proven reserves, participating in high-impact exploration wells and building acreage positions for future development."