ARCO plans a capital and exploration spending program that will see outlays of about $18.6 billion during 1991-95.
Lodwrick M. Cook, ARCO chairman and chief executive officer, told New York securities analysts 61% of the 5 year program, or $11.3 billion, has been earmarked for the company's three oil and gas divisions. ARCO Oil & Gas Co. is to get 48% of that sum, ARCO International Oil & Gas Co. 28%, and ARCO Alaska Inc. 24%.
Most of the outlays will be in exploration and development.
On other matters, Cook:
- Voiced optimism about ARCO's ability to continue replacing its crude oil and natural gas reserves.
- Disclosed a delay in scheduled start of production from Point McIntyre oil field on Alaska's North Slope.
MORE SPENDING PLANS
Most ARCO outlays not allotted to the three oil and gas divisions will be divided mainly between ARCO Products Co. and ARCO Chemical Co.
A major portion of ARCO Products' 5 year $2.9 billion program will go toward compliance with the federal Clean Air Act and other regulations.
ARCO Products has earmarked $800 million for marketing operations, including site acquisitions and improvements and storage tank replacement. Cook also said ARCO has "significant" exploration spending plans for the next 10 years totaling about $7.4 billion.
Spending for exploration will amount to about $1.2 billion in Alaska, $3.5 billion in the Lower 48, and $2.7 billion overseas.
RESERVES, PRODUCTION
ARCO's crude oil reserve profile today is equal to what it was in 1986, and natural gas reserves are about 17% higher. "On a barrel of oil equivalent (BOE) basis, we are nearly 5% ahead," Cook noted.
During the next 5 years, ARCO expects its BOE reserves, which currently total 4.3 billion bbl, to decline at a rate of only 1.5%/year, reaching 3.9 billion bbl by 1995.
Cook called the reserve profile conservative because it does not include ARCO's interest in the West Sak reservoir in Alaska and does not give credit for potential exploration success in Alaska.
Alaskan North Slope production will be enhanced early in the decade by the new Point McIntyre field. ARCO earlier said the field would be in production by late 1992, but lack of partner approval delayed estimated start-up until 1993.
ARCO expects international liquids production to double during the 1990s. Lower 48 liquids production is to increase through 1993 and hold levels above current production through 1996.
U.S. natural gas production will hinge on market demand. ARCO expects its non-U.S. natural gas production to increase when new Indonesian production and North Sea gas fields go on stream in 1993 and 1994.
Cook said things such as a drop of about $10/bbl in crude oil postings and low natural gas prices will keep ARCO from repeating its strong fourth quarter 1990 performance during this year's first quarter.
Copyright 1991 Oil & Gas Journal. All Rights Reserved.
