Page 10 - FSUOGM Week 43 2019

FSUOGM PERFORMANCE FSUOGM
Nostrum slashes production plan
KAZAKHSTAN
The Kazakhstan- focused producer has been grappling with falling output.
KAZAKHSTAN-FOCUSED junior Nostrum Oil & Gas has cut its full-year sales forecast, after suffering faster-than-anticipated production decline in the third quarter.
The operator of the Chinarevskoye field in the Pre-Caspian Basin produced 28,877 barrels of oil equivalent per day in the nine months ending September 30, down from 31,757 boepd a year before.
“Production declined faster than we had anticipated during Q3, resulting in a revision of our full-year sales volumes guidance to 27,000 boepd from 28,000 boepd,” Nostrum CEO Kai- Uwe Kessel said in a statement on October 29.
Nostrum is preparing to release its consoli- dated nine-month financial results on Novem- ber 19. However, it said this week it expected revenues for the period to exceed $250mn, versus $311.4mn a year earlier. Its cash position stood at $91mn at the end of September, com- pared with $120.8mn three months earlier.
Net debt should be no more than $1.022bn as of September 30, down from $1.108bn at the same point in 2018.
Nostrum has struggled with output decline
for several years, largely as a result of operational setbacks. It had hoped to boost production with the launch of a third gas treatment unit in 2016, but the facility is only just starting up.
“I am pleased to confirm that during Octo- ber we concluded the 72hr test of GTU3 and as a result can confirm it is commissioned,” Kessel said.
Nostrum’s technical team has also received analysis of the Biski North East & West and Tournasian reservoirs at Chinarevskoye from international contractors Schlumberger and PM Lucas, according to the CEO.
“We are reviewing the reports and will look to factor them in when determining the 2020 drilling programme and production guidance,” he said.
Amid continued difficulties, Nostrum’s management launched a strategic review of its business in June in a bid to enhance shareholder value, noting it might decide to sell the company. It is also considering other options such as agree- ments with third-party gas suppliers, bolt-on acquisitions, farming out stakes in some assets or a corporate transaction. ™
Azerbaijan expects flat oil output, gas growth this year
AZERBAIJAN
Gas output is seen reaching more than 27.4 bcm in 2023.
AZERBAIJAN reportedly plans to keep its oil output flat but raise its natural gas production in 2020.
The country plans to produce 37.712mn tonnes of oil next year, slightly less than the 37.752mn tonnes projected for 2019, and 37.820bn cubic metres (bcm) of gas, up from this year’s 35.183 bcm, its draft budget obtained by Reuters on October 24 showed.
Azerbaijan produced 38.810mn tonnes of oil and 30.134 bcm of gas in 2018. Oil and gas account for around 95% of exports and 75% of government revenue. The draft document reportedly also shows that the country expects to increase oil output to 38.246mn tonnes in 2021, 38.520mn tonnes in 2022 and 38.634mn tonnes in 2023.
Natural gas production is projected to rise to 42.833 bcm in 2021, 45.579 bcm in 2022 and 47.436 bcm in 2023.
Oil output in Azerbaijan is led by BP and Azerbaijan state energy company Socar’s Aze- ri-Chirag-Guneshli oilfields (ACG). It has been stable over the past couple of years.
BP and Socar have stated that ACG, which has so far produced 3.5bn barrels of oil, has the potential to pump a further 3bn barrels by 2050. The ACG consortium recently greenlight the $5bn construction of an extra 5mn tonne per year (100,000 barrel per day) oil platform at the site.
Azerbaijan plans to pump gas from the sec- ond stage of its giant Shah Deniz 2 (SD2) field in the Caspian Sea to European markets by 2020 along interconnected pipelines of the Southern Gas Corridor that will make a final landfall in southern Italy. SD2 shipments to Turkey were initiated last year.™
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Week 43 30•October•2019