ARCO has outlined a 5 year capital spending plan that calls for increased worldwide oil and gas exploration and development.
ARCO has earmarked $11.3 billion of its 5 year, $18.6 billion capital spending program for upstream activities. Of the total upstream outlays, 72% will go for U.S. operations and 28% for non-U.S. operations. On the downstream side, ARCO plans 5 year spending of $2.9 billion, or 16%, for refining/marketing and $2.4 billion, or 13% for ARCO Chemical Co. Included in the capital program is about $2 billion for environmental projects.
ARCO Chairman Lodwrick M. Cook and Pres. Robert E. Wycoff outlined the 5 year program at the company's annual shareholders meeting in Los Angeles last week.
ALASKA TOP U.S. PRIORITY
"Alaska is still considered the most promising place in the U.S. for significant oil discoveries," Wycoff said.
Last year, ARCO took part in almost every major exploration opportunity in the state, Wycoff said. This year, ARCO plans to participate in 8-10 exploratory wells on Alaska's North Slope and in the Beaufort Sea, Chukchi Sea, and Cook Inlet and expects to be active in eight scheduled lease sales.
"ARCO has invested $16.5 million and acquired an interest in 185,000 acres in two sales in January. This included some key tracts around the Kuparuk and Point McIntyre fields that we feel very good about," Wycoff said.
In the Lower 48, ARCO plans to participate in about 100 wells this year, mainly in the Gulf of Mexico, South Louisiana, California, and Oklahoma--areas in which the company has a record of success, Wycoff said.
Some of the wells will be drilled on properties acquired last year from TXO Production Corp. in Oklahoma's Arkoma basin and from Oryx Energy Co. in California's giant Midway-Sunset oil field.
ARCO also is seeking California approval for an improved waterflood in the THUMS Long Beach Unit in which it has a 60% percent interest (OGJ, Jan. 28, p. 44).
INTERNATIONAL FOCUS
ARCO's international exploration program will be larger this year than in 1990 when the company drilled a total of 50 gross exploration wells, Wycoff said.
Most of its discoveries were in the North Sea and Indonesia, where the company has production.
"The program is larger than last year in terms of number of wells, but it also is a larger stakes play than in the past. Our international strategy is to seek opportunities that have potential for larger discoveries and where success would be more leveraging to our future," said Wycoff. During 1990, 14 wells were drilled in such new venture areas, he noted.
ARCO's largest international operation is in the Java Sea off Indonesia, where the company operates a complex of about 150 platforms and associated processing and export facilities. An aggressive development program will enable ARCO to maintain current Indonesian oil production levels the next few years, said Wycoff, and a number of exploratory wells are being drilled.
Some of these exploratory wells target natural gas prospects that are being pursued because of attractive gas markets in the Jakarta area.
ARCO's development of Pagerungan field off Bali also is proceeding, and it has completed a gas supply agreement with Indonesia's state oil company.
Copyright 1991 Oil & Gas Journal. All Rights Reserved.
