ConocoPhillips CEO: Gazprom Wants More Talks on Shtokman
WASHINGTON Jul 19, 2007 (Dow Jones Newswires)
Gazprom OAO (GSPBEX.RS) officials have told ConocoPhillips (COP) that they're interested in talks about the U.S. company's inclusion in the massive Shtokman liquid natural gas project in Russia, the head of ConocoPhillips said Thursday.
Gazprom signed a deal earlier this month with France's Total SA (TOT) to be the leading international participant, leaving competitors Statoil ASA (STO) and ConocoPhillips potentially without a stake.
But ConocoPhillips Chief Executive James Mulva told reporters on the sidelines of an American Chamber of Commerce event here that Gazprom was still interested in including the U.S. company.
"We've received indications that further discussions will take place," Mulva said, "and we'd like to think that will lead to an opportunity for us.
"Whether we participate or not depends on that opportunity," he added.
Mulva, speaking ahead of his company's second-quarter earnings report next week, said capital expenditure, including exploration, is expected to be "a little above" $13.5 billion next year.
"Going forward, in the future years, it very likely could be $14 billion, $15 billion ... because everything costs more," Mulva said.
He added that with current oil and gas prices, and strong crack spreads, over the next 18 months there was a "reasonable expectation" the company would be able to fund its capital expenditure program, increase its dividend payout early next year, "and still have $15 billion that we can spend to repurchase shares."
As part of the company's North America operations, Mulva said that ConocoPhillips was looking for additional pipeline capacity to transport the several-hundred-thousand barrel-a- day production increase expected in the next five years out of its Canadian oil sands assets.
"Our company is considering all alternatives," including "buying space on pipelines that would be built by pipeline companies (and) participating with pipeline companies, having an ownership position," he said.
"What we're trying to do is make sure that we have long-term ... ability to take production and move it into the mid-continent and the Gulf Coast," he added.
The company has already said it plans to expand refining capacity at two of its U.S. refineries to accommodate the additional output.
Mulva said that for the entire Canadian oil sands industry, there is a need for around 1 million barrels a day of transportation capacity to move bitumen and heavy oil from Canada to the refinery system in the mid-continent and the Gulf Coast from around 2010-2011.
Copyright (c) 2007 Dow Jones & Company, Inc.
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