US-based integrated firms are shifting more of their capital spending dollars toward upstream projects and away from their downstream operations that manufacture, transport, and market refined products.
Marathon Oil Corp. announced that while its 2010 capital budget of $5.1 billion is down 17% from last year's outlays, downstream spending will contract by 53%.
Marathon plans to spend $1.1 billion this year on refining, marketing, and transportation.
Meanwhile, Marathon's worldwide exploration and production budget is set to jump 24% from a year ago. In the US, the firm's plans call for $1.656 billion in upstream outlays. This compares to a preliminary estimate of $1.488 billion in US E&P spending last year. Outside the US, Marathon's upstream spending for 2010 is set to total $1.2 billion vs. $821 million a year ago.
Marathon reported that its plans call for $668 million in spending for oil sands mining this year, down from $987 million last year, as expansion of its Athabasca oil sands project nears completion. This project is on track to begin mining operations in this year's second half.
ConocoPhillip's capital budget calls for an overall 10% reduction from 2009 to $11.2 billion. About 86% of this will target E&P operations, and 12% will be spent on the company's refining and marketing segment.
Meanwhile, Chevron Corp. has announced that its 2010 capital and exploratory spending program will total $21.6 billion, a 5% decline from its 2009 outlays. About 80% of this year's budget is planned for upstream projects, and 16% is set for downstream projects.
ExxonMobil Corp. reported that its 2009 capital and exploration expenditures climbed for worldwide upstream operations and for its non-US chemical business, but that the company's worldwide downstream capital spending declined from 2008.
Last December, ExxonMobil announced that it agreed to buy XTO Energy Inc. as part of its strengthened focus on unconventional resources (OGJ Online, Dec. 14, 2009). Founded in 1986, XTO holds large interests in major US shale, tight gas, and coalbed methane plays as well as the Bakken oil shale.
After the transaction closes, ExxonMobil plans to create an upstream organization to manage global development and production of unconventional resources. Outside the US, the company holds interests in unconventional resources in Canada, Germany, Poland, Hungary, and Argentina.
More Oil & Gas Journal Current Issue Articles
More Oil & Gas Journal Archives Issue Articles
View Oil and Gas Articles on PennEnergy.com
