Kerr-McGee Corp., Oklahoma City, plans to spend $630 million on exploration and production in the North Sea this year, the bulk of a $1.03 billion global E&P program announced Tuesday.
The investments are part of a record $1.24 billion budgeted for capital expenditures in 2001, up 60% from last year.
Kerr-McGee said it also planned to spend $185 million on E&P in the Gulf of Mexico, $55 million on US onshore prospects, and $160 million on projects in Australia, Indonesia, Ecuador, and China.
The company said it was budgeting $205 million for "worldwide exploration expense" to cover drilling costs for up to 30 exploratory wells.
Kerr-McGee Chief Executive Officer Luke R. Corbett attributed its largest ever capital expenditures budget to the "tremendous success of (the) exploration and appraisal program" that led to major development projects at its UK North Sea Leadon field, and the US Gulf deepwater Nansen and Boomvang developments, all ongoing in 2001.
Last month the UK Department of Trade and Industry approved Kerr-McGee $600 million-plus plan to develop Leadon, Birse, and Glassel fields using subsea horizontal wells tied back to an FPSO. The company expects first flow from the Leadon area fields in early 2002, with peak production of 50,000 b/d by the end of that year. The fields are estimated to hold up to 170 million boe.
"Production from Nansen and Boomvang in the deep waters of the Gulf of Mexico and from Leadon in the North Sea will fuel a 13% increase in oil and gas production volumes in 2002," said Corbett.
Capital expenditures for Kerr-McGee's chemical operations were set at $200 million, "excluding the 25 million Euro buy-up of the remaining 20% minority interest" held by Bayer AG in the company's titanium dioxide plants in Uerdingen, Germany, and Antwerp, Belgium.
Corporate capital expenditures will absorb the remaining $10 million, said Kerr-McGee.
