ConocoPhillips has approved a 2011 capital program of $13.5 billion, representing a significant increase in Exploration and Production (E&P) segment expenditures. Almost 90 percent of the capital program will be in support of E&P, while the Refining and Marketing (R&M) segment represents about 9 percent of this year's spending. The 2011 capital program is consistent with the company's plan to enhance returns on equity through shifting capital to higher returning investments, maintaining capital discipline and funding growth in shareholder distributions.
"This year's capital budget reflects our emphasis on building the upstream business," said Jim Mulva, chairman and chief executive officer. "We expect competitive returns from our increased investments in North American and Australian unconventional resource projects. In addition, we are pursuing organic reserve and production growth by converting our existing resource base to proven reserves, participating in high-impact exploration wells and building acreage positions for future development."
"We look forward to discussing our 2011 capital, operating and financial plans in greater detail when we meet with the financial community in March," added Mulva.
Exploration and Production
The 2011 capital program for E&P is approximately $12.0 billion, including capitalized interest of $0.4 billion and $0.7 billion for the company's contributions to the FCCL business venture and loans to other affiliates. This program also includes about $1.7 billion for worldwide exploration.
In North America, the capital program is expected to total approximately $6.0 billion. Spending in North America is increased, compared with prior years, with emphasis on liquids-rich resource plays and highest-return investments.
In Europe, Asia Pacific and Africa, the E&P capital program is expected to total about $6.0 billion.
The company will continue its focus on accessing, testing and appraising material opportunities in both conventional and non-conventional oil and gas plays. Exploration plans further appraisal of the Browse Basin Poseidon discovery and the Tiber and Shenandoah discoveries in the Gulf of Mexico. The company also plans to test material prospects in the Gulf of Mexico, Kazakhstan and the North Sea. Delineation of the company's position in the Eagle Ford shale play will continue, as will pilot programs in the Canadian Horn River Basin shale play and Poland.
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