Unocal eyes capital spending cuts
Reuters Story - March 19, 1998 11:42
EL SEGUNDO, Calif., March 19 (Reuters) - Unocal Corp
Thursday said lower crude oil prices will likely cause it to
shave $250 million from its $1.5 billion budgeted for capital
spending projects in 1998.
The cuts will affect three primary areas: near-term
production projects that are affected by low commodity prices,
investments in non-oil and gas business and longer-term
exploration projects that need more study.
.Unaffected are Unocal's high-value growth programs such as
exploration projects in the Gulf of Mexico shelf and deepwater
areas, the company said in a statement.
Also, growth programs in Indonesia, Bangladesh, Argentina
and the Caspian Sea will likely escape the budget ax at Unocal,
one of the world's largest independent oil and gas producers.
Prices for light sweet crude on New York Mercantile
Exchange slid to nine and a half year lows earlier this week
amid overproduction by OPEC members, weak Asian demand and a
weather-related drop in U.S. consumption this winter.
"In the U.S., we will likely see a reduction in workovers
and possibly fewer development wells drilled," said Roger
Beach, chairman and chief executive officer.
Unocal's production in the lower 48 states in the United
States will fall below previous forecasts, the company said.
It had expected to increase lower 48 U.S. production by
2-1/2 percent per quarter during the year from the levels
achieved in the fourth quarter of 1997.
The company based the lower production forecasts on lower
capital spending and pipeline curtailments in the Gulf of
Mexico. |
