approved 2007 cash capital expenditures of approximately $11.8b. Combined with about $0.6b for loans to affiliates and a $0.6 billion contribution to fund the recently announced EnCana (ECA)
transaction, the total cash capital spend is expected to be $13.0 billion. Including capitalized interest of $0.5 billion, the total authorized capital program for 2007 is $13.5 billion.
Eighty-four percent of the company’s 2007 total authorized capital program will be allocated to its Exploration and Production segment. The Refining and Marketing segment will receive approximately 13 percent, with the remaining being spent in Emerging Businesses and Corporate. Additional details on the capital program for each of the company’s business segments are provided below.
E&P’s 2007 capital budget, including capitalized interest of $0.5 billion, is expected to be $10.2 billion. This, combined with approximately $0.6 billion for loans to affiliates and the company’s planned $0.6 billion contribution to the EnCana transaction, results in a total E&P capital program of $11.4 billion.
The company has allocated $1.1 billion for U.S. refining, primarily for projects related to sustaining and improving the existing business with a focus on reliability, energy efficiency, capital maintenance and regulatory compliance. Work continues at a number of refineries on projects to increase crude oil capacity, expand conversion capability and increase clean product yield.
International R&M is expected to spend about $0.4 billion, with a focus on projects related to reliability, safety and the environment, as well as the advancement of a full-conversion refinery project in Yanbu, Saudi Arabia. The company continues to study other international refinery projects.
The remaining R&M capital budget is for projects in the company’s domestic transportation and marketing businesses.
Emerging Businesses and Corporate
The 2007 capital program for Emerging Businesses and Corporate is approximately $0.4 billion. The majority of the spending is earmarked for power generation, primarily for an expansion project at the company’s Immingham Combined Heat and Power plant in the United Kingdom.
In Corporate, capital expenditures are expected to be primarily for global information systems and services projects.