Unocal unveils 2004 capital expenditures

Unocal said it expects capital expenditures by its subsidiaries for 2004 of approximately $ 1.93 bn, excluding approximately $ 80 mm of capitalized interest. The investment plan compares with an estimated $ 1.66 bn in capital expenditures, which excluded approximately $ 60 mm in capitalized interest, for 2003.
For 2004, Unocal expects to maintain an exploration capital budget of about $ 325 mm. The primary focus will be deepwater Gulf of Mexico and Indonesia. Exploration spending on the deep shelf program in the GOM represents about 10 % of the overall spending plan and will be less than one-half of the 2003 level.

Nearly 50 % of the estimated spending, or $ 930 mm, is earmarked principally for large international crude oil and natural gas development projects that are expected to bring on new production in 2004 and 2005. Major international projects include Thailand oil and gas development, Indonesia deepwater development, Bangladesh gas field development, Caspian Sea oil development (including the export pipeline), and China's Xihu Trough natural gas development.
In the US, Unocal will be completing development of the Mad Dog field and beginning development of the K2 field in the deepwater Gulf of Mexico.

Worldwide annual average production for 2004 is expected to be nearly flat with 2003, or about 450,000 boe per day, since a significant number of the major development projects are expected to come online in 2005.
About 94 % of the total capital spending plan is for exploration and production projects, with about two-thirds targeted for outside North America.

Unocal 2004 capital spending detail (excluding capitalized interest),
millions of $

Category North America International Total
Major projects $ 100 $ 830 $ 930
Exploration drilling $ 195 $ 100 $ 295
Other E&P $ 340 $ 260 $ 600
All other $ 80 $ 30 $ 110
Total $ 715 $ 1,220 $ 1,935

Unocal is one of the world's leading independent natural gas and crude oil exploration and production companies. The company's oil and gas activities are in North America and Asia.