Page 15 - GLNG Week 29 2020

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Oil Search now expects
the PNG LNG project
to deliver 24.5-
25.5mn boe, up from
a previously projected
24-25mn boe.

Oil Search’s revenue plunges 26% in Q2

PERFORMANCE SYDNEY-LISTED Oil Search saw its sec- rate of 8.8mn tonnes per year in the second
ond-quarter revenue plunge 26% quarter on quarter compared with 8.7mn tpy in the previ-
quarter owing to the oil price crash in March. ous period.
Revenue for the April-June period amounted Oil Search now expects production from its
to $266.2mn, down from the $359.4mn in the operated assets to amount to around 3-4mn boe,
first quarter, the company said on July 21. The down from a previous guidance of 3-5mn boe.
result dragged the company’s first-half income to This is owing to the suspension of gas and con-
$625.6mn from $777mn a year earlier. densate production at the Hides Gas-to-Elec-
Weaker international oil and gas prices out- tricity (GTE) project, following the suspension
weighed production gains in the first half, with of operations at the Barrick (Niugini) operated The government
output climbing by 4% to 14.66mn barrels of oil Porgera gold mine.
equivalent from 14.13mn boe in the same period Commenting on the troubled three-train said in February
of 2019. expansion of PNG LNG, Oil Search said the
Oil Search said the average realised price for PNG government’s talks with ExxonMobil on that it had
oil and gas condensate tumbled by 53% to $23.05 terms that were “fair and balanced for all stake-
per barrel in the April-June period from $49 per holders” had been wrapped up in May and that ended talks with
barrel in the first quarter. Average realised lique- both sides had “re-engaged on the P’nyang gas ExxonMobil on the
fied natural gas (LNG) and gas prices fell by 19% agreement”.
from $9.08 per mmBtu ($276.6 per 1,000 cubic However, the independent added: “Due to P’nyang project.
metres) to $7.34 per mmBtu ($203.02 per 1,000 [coronavirus] COVID-19 and its impact on
cubic metres), owing to a two-to-three month oil and gas prices, Total and ExxonMobil have
lag between oil prices flowing through to LNG demobilised the majority of their LNG expan-
contract prices. sion technical and commercial staff.”
The company has maintained its 2020 pro- The government said in February that it had
duction guidance at 27.5-29.5mn boe, but has ended talks with ExxonMobil on the P’nyang
adjusted the composition of said volume. project, which is located in the Western High-
Oil Search now expects the PNG LNG pro- lands, because it felt the terms were not attractive
ject to deliver 24.5-25.5mn boe, up from a pre- enough for the country.
viously projected 24-25mn boe, owing to strong Under the proposed expansion, one train will
first-half production. The ExxonMobil-op- use gas from the P’nyang and other PNG LNG,
erated gas export project, in which Oil Search while two trains will use gas from the Total-led
owns a 29% interest, operated at an annualised Papua LNG project.™

Week 29 24•July•2020 www. NEWSBASE .com P15