Conoco Phillips is budgeting $832 million for capital expenses in Alaska this year, representing 8.8 percent of the $9.5 billion budgeted for companywide capital expenses.

The Houston-based oil company spent $1.4 billion in the state last year, representing 8.6 percent of total companywide capital spending that year. Of the Alaska spending in 2008, $506 million went to winning bids at a February lease sale for Chukchi Sea acreage.

The 2009 budget for Alaska is a 41 percent drop from total spending in the state in 2008, but an 8 percent reduction not counting the Chukchi Sea bids.

The company spent $666 million in Alaska in 2007 and $820 million in the state in 2006.

In late January, Conoco announced a $12.5 billion capital spending program for 2009, including a 20 percent reduction in capital spending in Alaska for the coming year.

Capital spending covers exploration and oil field development costs rather than ongoing operation of existing oil and gas fields.

Profits, taxes, costs: up

Conoco earned $2.3 billion in profit on $9.2 billion in revenue in Alaska last year and paid $3.4 billion in non-income taxes. In the Lower 48, the company earned $2.7 billion in profit on $10.2 billion in revenue and paid $764 million in non-income taxes.

Conoco paid $1.7 billion in non-income taxes in Alaska in 2007.

Conoco paid $33.83 in non-income taxes on each oil-equivalent barrel produced in Alaska last year, up from $15.27 in 2007. The figure is significantly higher than all other areas listed in the report, except for the $50.14 reported for a region marked "other areas." The company paid $4.20 in non-income taxes per barrel in the Lower 48 last year.

Production costs continue to rise in Alaska. Conoco reported per-barrel costs of $9.46 last year, up 48 percent from 2006 levels.

Alaska is the second most expensive region in Conoco's portfolio. The company reported per-barrel production costs of $10.74 in Canada, where it maintains operations in the expensive oil sands. Production costs in the Lower 48 averaged $7.72 per barrel.

Three NPR-A discoveries

Of the three North Slope exploration wells Conoco drilled last year, all "encountered hydrocarbons," although one was "expensed as a dry hole" and the company is "evaluating the potential for future development of the other two discoveries."

Last winter, Conoco drilled the Spark DD-9 well, and re-entered and tested the Rendezvous No. 2 well, both in the Greater Mooses Tooth unit in the National Petroleum Reserve-Alaska, and drilled the Char No. 1 well in the nearby Colville River unit.

The company is planning to drill two exploration wells in NPR-A this winter. Conoco said it drilled 47 development wells in Alaska last year, all productive.

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