By the OGJ Online Staff
HOUSTON, Jan. 7 -- Unocal Corp. said Monday that its 2002 capital expenditures will be unchanged at $1.7 billion, but a larger share would go for development projects.
The capital spending estimate does not include major acquisition expenditures for either year.
Charles Williamson, Unocal chairman and CEO, said, "We are shifting more of our capital spending emphasis in 2002 to development programs. We expect to spend about $250 million, or 15% of our plan, on development of new deepwater oil and gas production in Indonesia and the Gulf of Mexico. We also will move forward in Azerbaijan with the phase-one oil development and construction of the main export pipeline."
He said development expenditures are expected to be $1.1 billion, up from $900 million in 2001. Exploration capital would be $400 million, down from $500 million in 2001.
The 2002 exploration capital estimate includes spending for delineation of the Trident deepwater Gulf of Mexico discovery and the Ranggas deepwater Indonesian discovery.
Overseas, the company expects to spend $800 million on oil and gas projects in the Gulf of Thailand, the deepwater oil project at West Seno in Indonesia's Makassar Strait, and the phase one development and main export pipeline from oil fields in the Azerbaijan sector of the Caspian Sea. About $100 million is earmarked for exploration overseas, including deepwater drilling off Indonesia and Brazil.
Unocal said North American capital spending will be $800 million. This includes initial development of the deepwater Mad Dog field in the Gulf of Mexico and continued development of gulf resources. Exploration spending will be $300 million, including drilling in the Gulf of Mexico deepwater and shelf prospects, and in the Permian basin through Unocal's 65%-owned Pure Resources Inc., subsidiary.
The capital spending plan does not include major acquisition expenditures. In 2001, the company spent about $650 million for large acquisitions.
Unocal said it has no material hedges in place for 2002, except for a February and March costless collar on 24 billion btu of gas. The collar has a floor of $2.50 MMbtu and an average ceiling of $3.35/MMbtu.
Williamson said the February and March hedge positions represent 20% of Unocal's estimated worldwide gas production and 45% of the company's Lower 48 gas production for the 2-month period.
