ConocoPhillips Chairman and Chief Executive Officer Jim Mulva outlined investment opportunities to further develop the company's integrated energy portfolio and to build on its strong financial position.
"We are committed to providing value for our shareholders through continued execution of our strategy. This has been a good year, and our strong operating and financial performance will help us take steps to address the challenges our industry faces in meeting the continually growing demand for energy," said Mulva. "Our strong reinvestment rate will continue in 2006, where we have earmarked an estimated $12 billion in investment activity. This will fund our efforts to improve our access to worldwide exploration and production resources and increasing our refining capacity and capabilities."
ConocoPhillips again lowered the targeted range of its debt-to-capital ratio to 15 to 20 percent. The company's financial strategy also includes annual dividend increases and share repurchases.
In its Exploration and Production (E&P) business, ConocoPhillips outlined a series of growth opportunities for the near, medium and long-term. These include a number of projects to increase global gas supply. Developments to bring arctic gas from Alaska and Canada's Mackenzie Delta are being progressed, as well as liquefied natural gas projects in the Timor Sea, Qatar, Russia, Nigeria and Venezuela. Other reserve and production growth is expected to come from resource-rich areas such as Russia and the Caspian Sea, including the company's equity interest in LUKOIL; the Asia Pacific region; and the Middle East. Consistent with its long-term strategy, the company plans to maintain stable production in OECD countries and manage cost and production efficiencies across the globe. Domestically, the company will continue expanded drilling in both Canada and the U.S. Lower 48.
In its Refining and Marketing (R&M) segment, ConocoPhillips further defined its previously announced multi-year capital investment plan to increase capacity and improve utilization at nine of its 12 U.S. refineries. The company estimates it will spend approximately $4 billion to $5 billion from 2006 to 2011 to expand processing flexibility, improve output and further integrate with the company's E&P assets. Measured in terms of improved output, the investments in the aggregate are anticipated to yield the equivalent of adding a world-scale refinery to the company's U.S. refining system. The company is also pursuing opportunities to grow its refining capacity outside of the United States.
An update on the company's growing strategic partnership with LUKOIL was provided. Plans for contributions from the company's Commercial operations, and its Midstream, Chemicals, and Emerging Businesses segments were also provided.
"We have the technological capabilities, financial resources and a talented, dedicated work force to support the company's sustainable growth," said Mulva. "Our people have risen to the challenge of generating strong returns by performing safely, reliably and responsibly. This has been and will remain the key to our success."
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