Page 8 - AsianOil Week 12
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AsianOil
SOUTH ASIA AsianOil
warned that refinery run disruptions would, therefore, hurt the domestic upstream.
ARL CEO Adil Khattak informed the Paki- stani Petroleum Division last week to express his concerns about be able to keep the refinery run- ning if offtake volumes did not increase.
“Asof[March19],wearecarrying14,000 tonnes of HSD stocks with remaining ullage
of hardly one day,” Khattak said. “We wish to inform you that OMCs’ failure to lift the product from ARL will ultimately lead to complete shutdown of our refinery, which will result in disruption of the supply chain of E&P companies and associated gas sup- plies, leading to serious implications for all concerned.”
SOUTHEAST ASIA
Jadestone freezes Vietnamese gas project
PROJECTS & COMPANIES
SINGAPORE’S Jadestone Energy has decided to delay the Nam Du and U Minh natural gas pro- ject in Vietnam owing to the slide in oil prices.
The company said on March 19 that it had made the decision owing to the lack of government approvals for the field devel- opment plan (FDP) as well as to maintain the company’s “strong balance sheet in these uncertain times”.
Jadestone said that by removing the pro- ject from its planned 2020 capital expend- iture the company would reduce spending by 50%, or $90mn, to $80-95mn. The com- pany added that the cut was made because the project would not have contributed to cash flow before the fourth quarter of 2021 based on receiving government approvals this quarter. However, given that Hanoi is still to sign off on the project, Jadestone said it did not expect to achieve first gas from the project before late 2022.
Jadestone president and CEO Paul Blake- ley said the Nam Du and U Minh fields were an important domestic gas resource for Vietnam, which would ultimately feed power generators and fertiliser manufactur- ers in south-west Vietnam’s economy. How- ever, he added, “Vietnam currently has the potential to take temporarily cheap compet- itor piped gas, which is oil price-linked and benefitting from the current market disloca- tion, and the Nam Du and U Minh fields can
be developed when investment conditions improve.”
As such, the company’s remaining 2020 capital programme is largely comprised of infill drilling at the producing Montara and Stag projects offshore Western Australia and remains “entirely discretionary”.
Jadestone said it would continue to evaluate all investment, including poten- tial inorganic growth opportunities, while maintaining balance sheet strength. The company had an unaudited cash balance of $116mn, including restricted cash of $10mn and gross outstanding interest-bearing debt of $50.1mn, as of January 31.
The company expects to remain operating cash flow positive even at oil prices below $30 per barrel, owing largely to downside price protection through hedging and significant pricing premiums on oil from its producing assets in Australia. Jadestone said the mark- to-market value of the hedge as at February 28 was more than $18mn in its favour.
S&P Global Ratings has warned that international oil prices could fall to $10 per barrel this year.
Blakeley said: “While the level of eco- nomic turmoil is unprecedented, I am pleased that we retain substantial flexibility and will remain nimble, and course correct as necessary, to ensure ongoing value add to our shareholders.”
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w w w . N E W S B A S E . c o m Week 12 26•March•2020
