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Released December 07, 2021 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--ConocoPhillips (NYSE:COP) (Houston, Texas) plans to increase its 2022 capital expenditures (capex) 36% from its projected total for 2021, but that doesn't mean the oil and gas giant is preparing for a massive exploration or production buildout. Rather, the company expects only modest production growth, and acknowledges inflationary pressure is the driving force behind the additional spending. Industrial Info is tracking more than $5.8 billion worth of active projects involving ConocoPhillips globally, including $3.1 billion in the U.S. alone.
Click on the image at right for a graph detailing ConocoPhillips active projects worldwide, by world region.
Nonetheless, there's a big silver lining for shareholders and market watchers hoping for more production from ConocoPhillips: The planned companywide 2022 capital expenditures of about $7.2 billion "reflects the addition of Shell's Permian Basin properties, including the previously announced expected 2022 capital expenditures and production associated with that transaction." Shell Enterprises LLC, a U.S.-based subsidiary of Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, Netherlands), announced in September it had agreed to sell its business in the Permian Basin to ConocoPhillips for $9.5 billion in cash. For more information, see September 22, 2022, article - ConocoPhillips Cements Role in Permian Basin with Purchase of Shell's Production Assets.
About 40% of ConocoPhillips' 2022 capex will be allocated toward mid- and longer-cycle projects across the company's diverse Alaska and international regions, including ongoing project and development activity in Alaska. Although companywide production growth is expected to be in the low single-digit percentages versus 2021, much of it is expected to be driven by Alaska, following the startup in May of Greater Moose's Tooth 2 (GMT-2) crude oil-production pad, west of Prudhoe Bay. GMT-2 produces between 25,000 and 30,000 barrels of oil-equivalent per day, in addition to GMT-1's 11,500-barrel average. Subscribers can learn more from Industrial Info's project report.
ConocoPhillips also is in the process of developing the Willow project in its Bear Tooth development, farther west of Prudhoe Bay. The company is proposing a stand-alone central processing facility to develop resources in the area, which the company estimates to be in excess of 160,000 barrels per day. ConocoPhillips is adamant about pursuing the project, despite a U.S. District Court ruling in August that reversed a Trump-era approval of the project. The court found the previous presidential administration's findings were based on "flawed environmental analysis" and must be reconsidered by federal agencies. Subscribers can learn more about the central processing facility from Industrial Info's project report.
"ConocoPhillips remains committed to Willow, working through the legal process and more specifically, working through the issues that were identified through the district court ruling," one ConocoPhillips official said last month. In addition to the processing facility, Industrial Info is tracking more than $1.5 billion worth of proposed drilling projects associated with Willow. A final investment decision on Willow is expected next year. Subscribers can click here for a list.
About 60% of ConocoPhillips' 2022 capex is attributed to projects in the Lower 48 U.S., including $700 million associated with the recent Permian transaction. Annual production from the newly acquired Permian assets is expected to total about 200 million barrels of oil equivalent per day, which will be a significant part of estimated, companywide full-year 2022 production of 1.8 million barrels of oil equivalent per day.
ConocoPhillips did not put much emphasis on environmental and renewable-energy efforts in its announcement, when compared with similar capex statements released last week from Chevron Corporation (NYSE:CVX) (San Ramon, California) and, especially, Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas). But it did allocate about $200 million of the 2022 capex "toward energy-transition efforts across the company's global operations that are aimed at accelerating the reduction of the company's Scope 1 and 2 emissions and evaluating potential investments in end-use (Scope 3) emissions-reduction investments."
Jupiter Sulphur LLC (Phoenix, Arizona), a 50:50 joint venture between ConocoPhillips and Tessenderlo Kerley Incorporated (Phoenix), is preparing for a two-phase increase to its sulfur-handling capacity at an ammonium thiosulfate plant in Billings, Montana, to facilitate the increased extraction capacity received from a neighboring refinery's sulfur-rich waste stream. The additional 60 long tons per year of waste-stream feedstock will be converted into sulfur-containing products. Subscribers can learn more from Industrial Info's reports on Phase I and Phase II of the project.
To learn more about ExxonMobil and Chevron's capex plans, see December 2, 2021, article - ExxonMobil Ups Decarbonization, Capital Discipline Commitments Amid Fresh Concerns; and December 3, 2021, article - Chevron Plots $15 Billion in '22 Capex as it Juggles Drilling, Carbon-Reduction Plans.
Subscribers to Industrial Info's GMI Project Database can click here for a list of active ConocoPhillips projects globally.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
Click on the image at right for a graph detailing ConocoPhillips active projects worldwide, by world region.Nonetheless, there's a big silver lining for shareholders and market watchers hoping for more production from ConocoPhillips: The planned companywide 2022 capital expenditures of about $7.2 billion "reflects the addition of Shell's Permian Basin properties, including the previously announced expected 2022 capital expenditures and production associated with that transaction." Shell Enterprises LLC, a U.S.-based subsidiary of Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, Netherlands), announced in September it had agreed to sell its business in the Permian Basin to ConocoPhillips for $9.5 billion in cash. For more information, see September 22, 2022, article - ConocoPhillips Cements Role in Permian Basin with Purchase of Shell's Production Assets.
About 40% of ConocoPhillips' 2022 capex will be allocated toward mid- and longer-cycle projects across the company's diverse Alaska and international regions, including ongoing project and development activity in Alaska. Although companywide production growth is expected to be in the low single-digit percentages versus 2021, much of it is expected to be driven by Alaska, following the startup in May of Greater Moose's Tooth 2 (GMT-2) crude oil-production pad, west of Prudhoe Bay. GMT-2 produces between 25,000 and 30,000 barrels of oil-equivalent per day, in addition to GMT-1's 11,500-barrel average. Subscribers can learn more from Industrial Info's project report.
ConocoPhillips also is in the process of developing the Willow project in its Bear Tooth development, farther west of Prudhoe Bay. The company is proposing a stand-alone central processing facility to develop resources in the area, which the company estimates to be in excess of 160,000 barrels per day. ConocoPhillips is adamant about pursuing the project, despite a U.S. District Court ruling in August that reversed a Trump-era approval of the project. The court found the previous presidential administration's findings were based on "flawed environmental analysis" and must be reconsidered by federal agencies. Subscribers can learn more about the central processing facility from Industrial Info's project report.
"ConocoPhillips remains committed to Willow, working through the legal process and more specifically, working through the issues that were identified through the district court ruling," one ConocoPhillips official said last month. In addition to the processing facility, Industrial Info is tracking more than $1.5 billion worth of proposed drilling projects associated with Willow. A final investment decision on Willow is expected next year. Subscribers can click here for a list.
About 60% of ConocoPhillips' 2022 capex is attributed to projects in the Lower 48 U.S., including $700 million associated with the recent Permian transaction. Annual production from the newly acquired Permian assets is expected to total about 200 million barrels of oil equivalent per day, which will be a significant part of estimated, companywide full-year 2022 production of 1.8 million barrels of oil equivalent per day.
ConocoPhillips did not put much emphasis on environmental and renewable-energy efforts in its announcement, when compared with similar capex statements released last week from Chevron Corporation (NYSE:CVX) (San Ramon, California) and, especially, Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas). But it did allocate about $200 million of the 2022 capex "toward energy-transition efforts across the company's global operations that are aimed at accelerating the reduction of the company's Scope 1 and 2 emissions and evaluating potential investments in end-use (Scope 3) emissions-reduction investments."
Jupiter Sulphur LLC (Phoenix, Arizona), a 50:50 joint venture between ConocoPhillips and Tessenderlo Kerley Incorporated (Phoenix), is preparing for a two-phase increase to its sulfur-handling capacity at an ammonium thiosulfate plant in Billings, Montana, to facilitate the increased extraction capacity received from a neighboring refinery's sulfur-rich waste stream. The additional 60 long tons per year of waste-stream feedstock will be converted into sulfur-containing products. Subscribers can learn more from Industrial Info's reports on Phase I and Phase II of the project.
To learn more about ExxonMobil and Chevron's capex plans, see December 2, 2021, article - ExxonMobil Ups Decarbonization, Capital Discipline Commitments Amid Fresh Concerns; and December 3, 2021, article - Chevron Plots $15 Billion in '22 Capex as it Juggles Drilling, Carbon-Reduction Plans.
Subscribers to Industrial Info's GMI Project Database can click here for a list of active ConocoPhillips projects globally.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
