Unocal 2002 capital budget to keep pace with last year

Posted: Tuesday, January 29, 2002

ANCHORAGE (AP) -- Unocal Alaska's 2002 capital budget will keep pace with last year's budget, according to a company official.

The company announced it plans to spend $80 million this year, about the same as last year and up steeply from $35 million in 2000.

''We're not cutting -- we're maintaining,'' Chuck Pierce, Unocal's Alaska vice president, told Petroleum News Alaska earlier this month.

The company's major focus for 2002 will be south Kenai gas. That includes the Kenai-Kachemak pipeline. Pierce told the Resource Development Council in November that Unocal will be drilling in partnership with Marathon Oil Company. It also will drill on its own to develop gas resources for the pipeline the companies are planning.

Pierce told the council that there are ''significant deliverability shortages'' on the horizon for Cook Inlet gas, especially in the winter of 2003 and 2004.

Gas exploration and pipeline construction are timed to meet that window, with the Kenai-Kachemak pipeline expected to go into operation in November 2003.

Unocal also plans three to five wells in southern Kenai in 2002, Pierce said. Additional drilling will depend on the success of the wells, he said.

''There is gas exploration potential remaining in the Cook Inlet. We believe the south Kenai is a good place to start,'' Pierce said.

Unocal and Marathon are currently active in the Ninilchik area, Pierce told the council. Exploration success in the Anchor Point area could support a second phase of pipeline development.

Unocal next year plans to drill wells in the northern area and in the southern area. Marathon and Unocal together plan to drill five to nine exploration and appraisal wells, he said.

Unocal also has 162,000 North Slope Exploration acres acquired in state lease sales in 2000 and 2001.

''It's a new growth area for us. We hadn't picked up a new acreage on the slope in several years,'' Pierce said.



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