Overall around 78% of the budget has been allocated to exploration and production with $US1.3 billion anticipated for the development of projects in the Asia-Pacific. The majority of these funds will go toward continued development of the Bayu-Undan liquids and gas recycling project in the Timor Sea, oil and gas reserves in the offshore Block B and onshore South Sumatra blocks in Indonesia, and the second phase of Bohai Bay in China.

Earlier this year the Timor Sea Designated Authority gave approval of the development plan for the US$1.5 billion Bayu-Undan LNG project in the Timor Sea.

The field is located 500km offshore from Darwin, and 250km off the south coast of East Timor. In addition to 3.4 trillion cubic feet of natural gas the field has reserves of about 400 million barrels of condensate and LPG.

The condensate and LPG are to be shipped from an offshore facility for sale from first quarter 2004. The LNG is to be shipped from Darwin for sale to TEPCO (2 million tons per year) and Tokyo Gas (1 million tons per year) from the first quarter 2006.

ConocoPhillips has also allocated $US1 billion toward projects in Europe and Africa including expansion of the company's legacy positions in both the U.K. and Norwegian sectors of the North Sea.

Roughly $US0.9 billion of the E&P budget to develop projects in the U.S. Lower 48 and Latin America. The focus in these regions will be on the continued development of the Magnolia field in the deepwater Gulf of Mexico, completion of the heavy-oil upgrader associated with the Hamaca project in Venezuela, and development of the Corocoro field offshore Venezuela.

The company intends to spend approximately $US0.6 billion of the E&P budget for its Alaska operations. A majority of the capital spending will fund Prudhoe Bay, Kuparuk and western North Slope operations, as well as construction of Endeavour Class tankers to transport Alaska North Slope crude oil.

In Canada, E&P capital expenditures are expected to be about $US0.4 billion with a focus on Syncrude expansion, Surmont heavy oil development and Mackenzie Delta gas development.

E&P estimates it will spend approximately $US0.4 billion on projects in the Middle East, Russia and the Caspian region. Projects include the Kashagan field and the Baku-Tbilisi-Ceyhan pipeline in the Caspian region, and the Qatargas 3 liquefied natural gas facility in Qatar.