Unocal Will Spend More Overseas on Exploration

Unocal Corp. said Monday that this year, for the first time in company history, it will spend more for expenses of foreign exploration for energy resources than it does for exploration in the United States.

Expenses for foreign exploration of petroleum and geothermal energy will increase to $111 million in 1990 from $76 million in 1989, the company said. U.S. expenses will increase less dramatically, to $106 million from $92 million.

The reversal reflects an industrywide trend toward overseas exploration because of lower costs and less stringent environmental regulations, said M. Craig Schwerdt, an industry analyst with Seidler Amdec Securities Inc. in Los Angeles.

Unocal’s foreign energy exploration and production will be concentrated in Thailand, Indonesia, the Netherlands and Ecuador, the company said.

Overall, Los Angeles-based Unocal said it would boost capital and exploration spending to $1.5 billion in 1990, a 22% increase over 1989’s $1.2 billion.

“The increased investment level reflects the company’s improved cash flow and strategy of investing in projects which offer improved returns,” said Unocal Chairman Richard J. Stegemeier in a statement.

The capital budget in 1990 would be $1.27 billion, up from $1.05 billion in 1989. That would include domestic capital expenditures of $858 million and foreign capital expenditures of $413 million in 1990.

Under that, capital spending for domestic petroleum exploration and production will amount to $424 million in 1990. Capital spending for foreign petroleum exploration and production, including Canada, will be $370 million.

In refining, marketing and transportation, Unocal plans capital expenditures of $220 million in 1990, up from $143 million a year ago. The money will go to build new equipment at its Los Angeles refinery and to improve its service station and truck stop system.