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Oil Search’s Q3 revenue slides 24%
PERFORMANCE
OIL Search’s third-quarter revenue slid 24% year on year on the back of production interruptions and lower international oil prices.
The developer’s revenue slipped to $361.1mn in July-September from $474.9mn in the same period of 2018.
The company said damage at a one of the mooring chains at an offshore liquids loading facility in the Gulf of Papua meant crude pro- duction from the Kutubu, Moran and Agogo fields had either been curtailed or shut in during August and September. Priority access to availa- ble liquids storage was given to PNG LNG con- densate, it added.
As a result of these issues the company pro- duced 6.81mn barrels of oil equivalent (boe) in the July-September period, down 1% quarter on quarter and 10% y/y. Sales amounted to 6.47mn boe, down 4% q/q and 13% y/y.
In addition to the mooring chain issues, the timing of shipments, weaker global oil prices and a higher proportion of condensate relative to oil all contributed to the slump in sales.
Repair work on the chain was completed in mid-October, with standard loading opera- tions reinstated and production now ramping up to normal rates. The loading issue, however,
prompted the company to revise down its full- year 2019 production guidance from 28-31mn boe to 27-29mn boe.
At the same time, Origin revised up its guid- ance for production costs from $11-12 per bar- rel to $12-13. Oil Search’s managing director, Peter Botten, said the higher costs reflected the “lower production base, costs associated with the repairs to the mooring buoy and lower insurance receipts for earthquake remediation activities than previously anticipated.”
Oil Search’s production figures were domi- nated by the PNG LNG project, which contrib- uted 6.2mn boe in period. The company said the project had operated at 20% above nameplate capacity during the three-month period.
Botten said he expected the PRL 3 joint ven- ture and the government to agree on the P’nyang gas development, which will feed a new 2.7mn tpy train to be built at PNG LNG, before the end of the year. ExxonMobil and Oil Search each own 36.86% of the venture, while Santos owns 14.3% and Merlin Petroleum holds the remainder.
Woodside delays Browse FID, brings forward Pluto LNG expansion
PROJECTS & COMPANIES
AUSTRALIA’S Woodside Energy has delayed a final investment decision (FID) on its proposed Browse mega-project to the second half of 2021. However, the company has also brought plans to approve its Scarborough gas project and Pluto LNG expansion forward slightly.
An FID on the $20.5bn Browse project was previously expected in late 2020, but has had to be delayed amid ongoing negotiations between Woodside and its partners in the scheme. There is only some overlap in ownership between the Browse gas field and the related North West Shelf LNG project. Woodside, Royal Dutch Shell, BP and Japanese firms Mitusbishi and Mitsui & Co. havestakesinboththefieldandtheLNGplant. Meanwhile, Chevron and BHP have interests in the LNG project, and PetroChina owns a stake in the Browse field. Woodside said it still expected the partners to be able to start front-end engi- neering design (FEED) work for Browse by the end of this year following delays.
The company had been planning to approve the Pluto LNG expansion and
Scarborough project in the first half of 2020, but now says the FID will come in the early part of that year.
The expedited timetable for the Scarborough project is dependent on Woodside reaching an agreement with partner BHP on a price for processing gas from the field at the Pluto facility. Woodside’s chief financial officer, Sherry Duhe, told Reuters that there was pressure on BHP to finalise a tolling agreement before the end of the year. The miner also has an option to increase its stake in Scarborough by 10% to 35%, which expires on December 31.
“We’re just haggling on the final bit of pricing onthetoll,”Duhesaid.“Timeisdefinitelywork- ing in all of our favour now to just go ahead and ink that deal so that we can move to FID in early next year on both Scarborough and Pluto.”
Woodside also reported third-quarter rev- enue of $1.16bn on October 17, which was unchanged from a year earlier. Higher pro- duction was offset by weaker LNG prices dur- ing the quarter.
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