Conoco to cut capital spending in Alaska:
Conoco Phillips is budgeting $832 million for capital expenses in Alaska this year, representing 8.8 percent of the $9.5 billion budgeted for companywide capital expenses.
The Houston-based oil company spent $1.4 billion in the state last year, representing 8.6 percent of total companywide capital spending that year. Of the Alaska spending in 2008, $506 million went to winning bids at a February lease sale for Chukchi Sea acreage.
The 2009 budget for Alaska is a 41 percent drop from total spending in the state in 2008, but an 8 percent reduction not counting the Chukchi Sea bids.
The company spent $666 million in Alaska in 2007 and $820 million in the state in 2006.
In late January, Conoco announced a $12.5 billion capital spending program for 2009, including a 20 percent reduction in capital spending in Alaska for the coming year.
In reality, due to the worldwide recession, Conoco has reduced spending across the globe, and therefore they have reduced spending in Alaska. However, the percentage of spending towards Alaska in comparison to the total Conoco budget has actually increased.
Last year Conoco committed 8.6% of their total spending to Alaska.
This year Conoco is committing 8.8% of their total spending to Alaska.
Like most companies, Conoco has decided to be more “prudent” in their spending in real dollars, but in reality they have actually increased their commitment to Alaska.