Oil Search 2018 profit jumps despite earthquake effects

The Papua New Guinea-focused oil and gas producer, Oil Search reported an increase in its full-year 2018 net profit despite its operations being affected by the February earthquake in PNG highlands. 

Oil Search noted its profit after tax reached $341 million for 2018, 13 percent above the 2017 figures.

Commenting on the results, Oil Search managing director Peter Botten said the strong performance came on the back of stronger global oil and gas prices, with the average realized oil and condensate price up 27 percent and LNG and gas price 31 percent higher.

He said this more than offset a 17 percent decline in production and sales volumes due to the temporary shut-in of production following the February earthquake in PNG and resulted in a 6 percent increase in total revenue, to $1.54 billion.

Botten said Oil Search and its joint venture partners also made significant progress on LNG expansion in PNG with the government and the PRL 15 joint venture are on track for finalizing the Papua LNG gas agreement before the end of March 2019.

A gas agreement for the P’nyang PRL 3 is expected to be finalized shortly after, which will allow aligned FEED entry decisions to be made on the proposed three-train LNG expansion.

Upstream pre-FEED work is largely complete, with preliminary market engagement underway. Downstream pre-FEED technical work is also going well and remains on schedule for completion toward the end of the first quarter of 2019.