Arco to spend $ 3.78 in 1998

Arco has approved a $ 3.78 bn additions to fixed assets budget for 1998, the second year of a previously announced five-year plan which calls for Arco to spend $ 19 bn for identified opportunities.
The 1998 program represents a 26% increase over 1997 when spending for additions to fixed assets totalled about $ 3 bn.
Arco Chairman and Chief Executive Officer Mike R. Bowlin said, "We have a number of resources which we are now ready to monetize. Our 1998 spending program will make it possible for us to achieve our goals for production growth of 4 to 5% over the next few years and annual reserves replacement in excess of 120%.
"The program is consistent with Arco's commitment to expand its world-wide operations while maintaining financial flexibility," Bowlin said.
The 1998 additions to fixed assets program continues the emphasis on upstream oil and gas which is budgeted at $ 2.60 bn. Nearly half of the upstream spending, or $ 1.26 bn, is targeted for international projects. Upstream spending in 1997 totalled $ 2.28 bn, with 50% of that spent overseas.
"The 1998 budget for international includes additional enhanced oil recovery investment at the Rhourde El Baguel field in Algeria as well as spending for the new Shearwater gas condensate field in the North Sea and development of the Villano field in Ecuador.
"In Alaska, we will be developing the Alpine field which Arco discovered in the Colville area plus several of our successes which resulted from our 1997 satellite drilling program. There will be production from these satellite successes in 1998," Bowlin said. "In addition, we are continuing a phased development of the West Sak field."
"Overall, our Alaska exploration and development was very successful in 1997. We plan to continue investing on the North Slope as we stabilise production after 1999," he added. Arco's capital spending in Alaska is budgeted at $ 515 million for 1998, up from $ 275 mm in 1997.
In the Lower 48, spending by Vastar Resources, Inc., in which Arco holds an 82.2% interest, accounts for $ 660 mm in Arco 's budget for 1998, up from $ 630 mm in 1997. Over half of Vastar's 1998 budget is allocated for development work in about 80 onshore and offshore Gulf of Mexico fields and continuing its deepwater exploration activities.
In Arco 's downstream operations, refining and marketing spending of $ 600 mm is planned for 1998, up from $ 330 mm in 1997. Construction of the West Coast's first polypropylene manufacturing facility at Arco 's Los Angeles Refinery is included in the spending plans along with further enhancements to Arco's retail marketing network and start of construction of two millennium-class marine tankers.
Spending at Arco's 82.3% owned Arco Chemical Company will account for $ 565 mm in Arco's capital spending budget for 1998. In 1997, Arco Chemical Company accounted for $ 260 mm in the Arco total. Arco Chemical is constructing a worldscale propylene oxide (PO) plant and a butanediol plant in Rotterdam which together account fornearly half of its 1998 budget.