Conoco Sets Budget for 2002

Conoco reported a 2002 capital budget of $2.8 billion, about the same as last year. "We remain committed to investing only in highly attractive opportunities that will maximize shareholder value and financial performance," said Conoco Chairman and CEO Archie W. Dunham. "Conoco is in a position to capitalize on a multitude of global opportunities." Dunham said $2.3 billion of the budget is earmarked for upstream operations, with most to be spent on development of crude oil and natural gas reserves in North America, the United Kingdom and Southeast Asia. The company has budgeted about $550 million for U.S. oil and natural gas field development, including the new Magnolia field in deepwater Gulf of Mexico and the Lobo and San Juan onshore natural gas fields. More than $430 million has been budgeted for Canadian projects, including oil, natural gas and oil sands developments in Western Canada. Conoco will spend nearly $400 million in the United Kingdom, predominantly on the Caister Murdoch System III development, which is expected to achieve first production of natural gas in the fourth quarter of 2002. Conoco also will focus on developing Clair, the largest undeveloped field on the U.K. Continental Shelf. About $250 million will be allocated to Norway and the Netherlands. Exploration and development projects in Southeast Asia will receive about $500 million, including fields in the Indonesian sector of the Natuna Sea and Vietnam's Cuu Long Basin. The company's total exploration program has been set at $500 million, down from $582 million in 2001. Wildcat exploration and appraisal drilling will increase substantially, with more than 40 wells in 2002. Exploration will continue in the deepwater Gulf of Mexico, Norway, United Kingdom, Vietnam, Malaysia, Indonesia, Nigeria and Canada. Downstream capital expenditures are budgeted at $500 million, with more than 40 percent to be spent in the United States. The focus will be on clean fuel projects in the U.S. and continued growth of the company's retail operations in Europe and Asia.