Oxy Lowers LatAm Capex to US$80mn in 2005

US oil company Occidental (NYSE: OXY) has lowered its Latin American capex budget to US$80mn this year from US$180mn in 2004, mainly due to reduced spending in Ecuador, Occidental's communications VP Larry Meriage told BNamericas.

Occidental's Eden-Yuturi field in Ecuador came online in 4Q03. "We had a major development project we were spending capital on and that project has largely been completed," Meriage said. This was one of the company's major development projects through 2003-2004, he added.

Occidental's total 2004 production in Ecuador averaged 46,000 barrels a day (b/d) compared to 25,000b/d in 2003. The increase "really reflects the full field development of Eden-Yuturi," Meriage said. The Eden-Yuturi field is in the Amazon province of Nueva Loja and has estimated reserves of 154 million barrels of crude.

Some of Occidental's 2005 budget will go towards Colombia's Caño Limón oil field, Meriage added. In April 2004, Colombia's government extended Occidental's Caño Limón contract, which was due to expire in 2008, to last through the economic life of the field, currently estimated to be at least through 2018. Under the amended terms of the contract, Occidental will undertake a new 2004-2007 comprehensive work program that includes drilling approximately 40 new development wells and a 3D seismic survey. Seismic work is expected to begin before year-end, according to a previous BNamericas report.

In Peru, Occidental drilled a wildcat well on block 64 last year that came up dry though the company is planning to drill a second structure on the block this year, Meriage said. Oxy has a 50% working interest and is the operator of block 64. US oil company Amerada Hess and Canada's Talisman Energy each own 25% interests in the block.

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