Oz Oil Search Doubles H1 Profit
Australian oil and gas explorer Oil Search August 20 said its net profit during the six months to June (H1 2019) rose 105% year on year owing to higher sales volume and realised LNG and gas price.
Company’s net profit in H1 was US$161.9mn as against H1 2018 net profit of US$79.2mn, which was impacted by the February 2018 PNG Highlands earthquake, Oil Search said. Total sales volume stood at 13.39mn barrels of oil equivalent, up 37% year on year. Average realised LNG and gas price was US$9.71/mn Btu, up 8% year on year, the company said. Total revenue during H1 was US$776.9mn, an increase of 39% year on year.
The PNG LNG project produced at an annualised rate of 8.6mn metric tons/year during H1, 25% above nameplate capacity. “This was an excellent result given the two-week partial shut-in for scheduled maintenance. No further major downtime is planned for 2019,” the company said.
Commenting on the Papua LNG gas agreement, Oil Search said that “the Papua LNG project joint venture believes that the legally binding agreement, negotiated and signed in good faith, is fair and balanced, equitably allocating project benefits and returns to the state, the project participants and other stakeholders.”
The agreement was signed by the previous Papua New Guinea (PNG) government and the French Total-led PRL 15 joint venture in April 2019. The new PNG government that took over in May commenced a review of the agreement. While initially indicating that the government had decided, in principle, to stand behind the agreement, more recently it has signalled its desire to renegotiate some of the agreement terms. A team representing PNG government has left for Singapore to renegotiate the Papua LNG gas agreement.
Oil Search said discussions between the PNG government and Total (as Operator of the Papua LNG project) continue and the joint venture is seeking a resolution by the end of August, prior to the expiry of contract bids for front end engineering design (Feed) activities.
“We remain committed to supporting both Total and the PNG government in concluding discussions and moving the project forward in the earliest timeframe. This will then allow negotiations on the P’nyang gas agreement to recommence. Finalisation of both these gas agreements is a key pre-requisite for the expansion projects to progress into Feed,” Oil Search said.