ConocoPhillips Makes Huge Investments To Achieve Alaska Oil Reserves

ConocoPhillips Invests money in the National Petroleum Reserve and Alaska Oil and Gas Division lease.

ConocoPhillips is making huge investment in Alaska in order to achieve the area’s oil reserves. It was reported to make high bid worth $788,680 for six of the tracts in the US Bureau of Land Management, and later invested $409,011 in three North Slope tracts at the Alaska Oil and Gas Division lease.

ConocoPhillips aims to make Alaska its nets drilling project. The huge investments are a major indication to the statement but this oil company is not the only one in the business who has eyes for the region, as many others in the business are looking for the same benefits. This is mainly due to the 1989 Exxon Valdes spill, which pumped around 11 to 38 million gallons of crude oil in to the waters of the region, and the fact that other businesses have not yet touched the areas reserves.

The Oil Company third quarter daily production was 1.554 million barrels of oil (MMBOE). Evidently, it is producing the right amount with a growth in its margin by 3.5%, making liquid-rich ventures its focus in US and Canada. The organization is hoping to replace the reserves and keep the production high in the future. It has a strong foothold in North America’s gas and oil business. The oil giant is also keeping expectation of lowering labor cost by 2016, after completing the delivery of oil from Surmount 1.

The oil and gas company has cut its capital expenditures for this year to $13.5 billion, mainly because of the unfortunate decline in the oil industry and oil prices. It has moved its focus to upstream operations, thanks to the success achieved in the 66 spin-off. This will cause the company to lose the chance of diversifying but it cannot do much about the market changes worldwide in crude oil and gas prices.

ConocoPhillips is learning to deal with losses and making the required changes to stay successful. If this does not happen, the least it can do is to protect its business as much as possible. While the oil prices might remain low for a while, the company is planning to focus on upstream operations making it even more fragile to the prices. This recent strategy of the oil giant has not proved to be very successful. Most of the businesses in the oil sector are facing the same problems due to the decline in the products prices.

ConocoPhillips stock closed at $54.61, going green by 1.04% on December 1.