New York (Platts)--11Mar2009

ConocoPhillips plans to slow its Western Canadian oil sands development
until costs drop further, as well as some of its natural gas projects in the
region that are "not viable at today's gas prices," said Chairman and CEO Jim
Mulva Wednesday.

ConocoPhillips is Canada's third-largest gas producer, with Western
Canada production over 1 Bcf/d. Two-thirds of the company's acreage in the
region is undeveloped.

"We have plenty of room to roam," Mulva said at ConocoPhillips' annual
meeting with analysts in New York.

Mulva added the Western Canadian gas production could readily be expanded
as prices climb. He stressed that while ConocoPhillips was deferring several
projects, it was not canceling them.

"The world medium- and long-term is going to depend on fossil fuels," he
said. "Eight percent of energy over the next several decades is coming from
fossil fuels."

Just how long ConocoPhillips would slow its oil sands effort depends on
bitumen and oil prices, on technology involved, including the ability to use
less gas and water for production; and on how much costs will fall, Mulva
said. "Costs are coming down pretty dramatically," he said. "When we say
defer, we're not talking years, we're talking months, quarters, maybe up to a
year."

Speaking about the Denali Alaska gas pipeline project, proposed last June
by ConocoPhillips and BP, Mulva said President Barack Obama has identified the
4 Bcf/d project as a means of reducing US dependence on foreign oil. The
pipeline would bring North Slope gas down to a pipeline in Alberta for
transport to the Lower 48 states.

"We know it's going to get far more federal attention," he said.
"Obviously, Alaska would like to see it go."

Mulva repeated the partners plan a 2010 open season for gas deliveries;
first gas deliveries are eyed for 2019.

While current gas prices have led ConocoPhillips to cut back on its
Canadian operations, Mulva discounted the low prices as a roadblock to the
pipeline project's development. "You can't look at gas prices today," he said.
You have to look at prices 10 years from now."

--Richard Rubin, richard_rubin@platts.com