That spending includes $1 billion for its Canadian oil sands partnership with Encana Corp <ECA.TO>.
NEW YORK (Reuters) - ConocoPhillips <COP.N>, the third-largest U.S. oil company, said on Friday its 2008 capital spending would total $15.3 billion, an increase of about 13 percent from the top end of its expected 2007 budget.
That spending includes $1 billion for its Canadian oil sands partnership with Encana Corp <ECA.TO>.
The company expects to spend $11 billion on exploration and production projects in 2008, including about $600 million of capitalized interest, plus the spending on the Encana venture.
Chief Executive James Mulva said in October that 2007 spending was expected to be between $13 billion to $13.5 billion. The company slashed its spending by around 25 percent from 2006, as the company sidelined or delayed some of its ongoing projects due to surging costs.
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"The business environment remains challenging, with inflation in materials and services impacting both project investment and day-to-day operating costs," Mulva said in a statement.
"We will continue to exercise capital discipline and selectively invest in projects that add production and increase our capability to add value over the long term."
Earlier on Friday, Lehman Brothers said it expects global spending on oil and gas exploration and production to rise more than 11 percent in 2008, fueled by investment outside the U.S. Rival Chevron Corp <CVX.N> said on Thursday its 2008 spending would rise 15 percent from 2007.
Conoco plans to spend 80 percent of the budget on exploration and production, with 18 percent set aside for its refining and marketing operations.
Conoco also said it expected to generate about $3.1 billion from asset sales completed in 2007, including the disposal of its U.S. retail assets.
About $150 million will go for research for unconventional oil and gas resources and development of alternative and renewable resources.
The company is also in the process of selling off non-strategic assets. It expects to have generated $3.1 billion in proceeds from the sales in 2007 and plans to complete the sale of its U.S. retail assets in 2008.
Shares of ConocoPhillips fell 12 cents to $83.18 in afternoon trading on the New York Stock Exchange on Friday.
(Reporting by Matt Daily and Michael Erman; Editing by Derek Caney/Jeffrey Benkoe/Leslie Gevirtz)
