Newspaper article THE JOURNAL RECORD

Phillips Plans to Hike Upstream Spending 30%

Newspaper article THE JOURNAL RECORD

Phillips Plans to Hike Upstream Spending 30%

Article excerpt

BARTLESVILLE _ Phillips Petroleum Co. plans a 30 percent increase in upstream spending this year to about $865 million, Chairman C.J. Silas told shareholders Monday.

Phillips, the nation's 12th-largest oil company, is drilling the third well of a promising oil prospect in the North Cook Inlet in the North Sea, and also plans additional wells offshore the North Slope of Alaska.

"As hard as we're working to restrain the day-to-day costs of running our company, we're just as determined to press ahead with the investments that are central to our success in the long run," Silas said at the company's annual meeting in Bartlesville.

But Silas noted that downstream businesses continue to show low profits.

"We're moving aggressively to improve efficiency and reduce expense in our refineries and chemical plants," he said.

Silas also called President Clinton's proposed Btu tax discriminatory, saying it could cost Phillips more than $1 million a day, money that would be passed on at the pump.

Noting that the proposed tax would increase Phillips' utility costs, Silas said, "That's nothing compared with the extra tax we'll pay for the products we make, such as gasoline."

"That figure is estimated to be well over $1 million a day, or about $460 million a year," he said. "Consumers will obviously absorb much of this cost through higher prices for gasolines and other fuels."

Silas said Phillips prefers spending cuts and consideration of a value-added tax to reduce the budget deficit. He urged shareholders to state their opposition to the Btu tax to their congressmen and senators.

During an overview of Phillips operations, W.W. Allen, president and chief operating officer, reviewed a number of Phillips developments, including Alaska and North Sea prospects. Allen highlighted the Sunfish project in the North Cook Inlet, where Phillips, with a 40 percent interest, is drilling the third well of a promising oil prospect. …

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