Occidental Petroleum Corp. (OXY) Chief Executive Steve Chazen said during a conference call that the company will spend 10% more on capital projects in 2012 than it previously planned.
The company now targets $9.2 billion of capital expenditures, up from the $8.3 billion it previously announced to investors.
About $600 million of that increase will be spent on the Al Hosn Shah gas project, which is nearly half complete.
"We expect our capital spend rate to slow down from the current levels during the back half of the year and stabilize in the fourth quarter," Mr. Chazen said.
But the company doesn't expect to make acquisitions on a large scale through the end of the year.
"We are not in any hurry," Mr. Chazen said. "You shouldn't expect to see any large-scale M&A from us."
In the U.S., Mr. Chazen said the company's total average rig count will fall to 70 from 75 rigs by the end of the year, but he said he doesn't expect that to slow the pace of drilling.
"I expect we'll drill as many wells in the back half as we did the first half of the year with fewer rigs," he said.
Occidental will focus on oil rather than natural gas or natural gas liquids, which Mr. Chazen described as "not that exciting" right now, despite the modest recovery of NGL prices from June lows.
Mr. Chazen said much of the company's increase in production, which was at a record level in the second quarter, came from the Bakken Shale.
He said transportation of oil out of the Permian Basin in West Texas is still a challenge, but the company is producing enough crude there to fill one or even two pipelines.
"The plan in the basin is to expand our gathering system, hook it into these pipelines and maybe make one or two lines" into Houston or Corpus Christi, Mr. Chazen said.
Mr. Chazen said he expects modest increases in international production through the end of the year. Sandy Lowe, president of the company's international oil and gas operations, said production is at pre-war levels in Libya, with new teams in the country working on new projects.
Copyright (c) 2012 Dow Jones & Company, Inc.
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