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CEO Mulva pushes energy diversity
By Staff and Wire Reports
Imported oil is important, as are alternative fuels, says the top
executive at ConocoPhillips.
United States should import more crude from the Middle East and
other foreign sources while also developing alternative energy
sources to diversify supply, ConocoPhillips CEO Jim Mulva said
"The U.S. needs to encourage diversified sources of energy coming
from the Middle East, Africa and Russia as opposed to concentrating
on one source of energy from one location," Mulva said in an
interview in Abu Dhabi.
A thriving global economy has driven demand for oil and natural gas,
leading to a rush for resources by companies and governments alike.
The number of drilling rigs operating worldwide reached a 20-year
high Aug. 31, while a growing list of projects to refine oil and
export natural gas have bolstered engineering and construction
Competition for access has pitted longtime international oil
companies like ConocoPhillips, Exxon Mobil Corp. and Royal Dutch
Shell PLC against newcomers such as China National Offshore Oil
Winning refinery or natural-gas projects is a way for companies to
develop partnerships with Middle Eastern governments and state-owned
companies such as Abu Dhabi National
Oil Co. and Saudi Aramco that control more than 60 percent of the
world's oil and gas resources, according to "Statistical Review of
World Energy," a report by BP PLC.
the big oil companies don't have is access to resources, because the
national oil companies have it," said Gene Gillespie, an analyst at
Howard Weil Inc. in New Orleans. "But they do have access to
markets, which the state-owned companies don't."
ConocoPhillips signed a contract in August to help Saudi Aramco to
build a 400,000-barrel-a-day refinery in Yanbu on the Red Sea coast.
The $6 billion facility is scheduled to be operational by 2011.
ConocoPhillips also is considering a proposal to build a
500,000-barrel-a-day refinery in the United Arab Emirates. Abu
Dhabi-based International Petroleum Investment Co. is planning an
oil pipeline to the east coast port of Fujairah, where the refinery
would be built in order to bypass the Straits of Hormuz, which is
adjacent to Iran.
"Given the resources that are in the Middle East, it's important for
companies like ourselves to participate in the region," Mulva said.
"When we undertake investment opportunities on the refinery side of
the business, such as with Saudi Aramco or Abu Dhabi, those
investments stand on their own and we don't look at them as a way to
get an upstream opportunity."
ConocoPhillips, which would own 49 percent of the facility, must
justify the cost of building both refineries at a time when it is
digesting its $35 billion acquisition of U.S. natural-gas producer
Burlington Resources Inc. in March, and planning a $10.7 billion
oil-sands venture with Calgary, Alberta-based EnCana Corp.,
announced in October.
The Burlington deal has been positive for Oklahoma, with about 65
jobs being shifted from Fort Worth to Bartlesville.
ConocoPhillips also announced last year it would add about 500 jobs
in Bartlesville and followed up last week with a plan to relocate
300 more jobs from Houston.
ConocoPhillips now employs about 2,700 people in Bartlesville