Oil Search revenue jumps as PNG LNG production recovers

The Papua New Guinea-focused oil and gas producer and PNG LNG stakeholder, Oil Search reported a jump in its third-quarter revenue.

One of the main reasons for this is the recovery of production at the giant LNG export project partly located in the Highlands region of Papua New Guinea following a massive earthquake in the country earlier this year.

ExxonMobil owns 41.6 percent in the LNG project while Oil Search holds a 29 percent interest in PNG LNG.

Oil Search said in its third-quarter report on Wednesday its total revenue rose by 81 percent when compared to the previous quarter. Revenue increased to $474.9 million, the highest quarterly revenue achieved since the fourth quarter of 2014, it said.

Compared to the same quarter a year ago, revenue rose almost 25 percent.

Production in the third quarter was 7.5 million barrels of oil equivalent (mmboe), 39 percent higher than in the second quarter and close to the pre-earthquake level of 7.6 mmboe produced in the fourth quarter of 2017.

Production declined 4.8 percent when compared to the third quarter of 2017.

The PNG LNG project achieved annualised production rates of 8.9 MTPA for the quarter, 9.0 MTPA for September and a daily rate of 9.2 MTPA, the highest rates since the project came onstream in 2014, Oil Search said.

Based on the “strong performance” by the PNG LNG project since the recommencement of production post the earthquake, Oil Search said it now expects 2018 full year production to be between 25 – 26 mmboe (previously 24 – 26 mmboe).

Oil Search Managing Director Peter Botten said that during the quarter, the company also benefited from higher global oil and gas prices.

The company achieved an average realised oil and condensate price of $76.17 per barrel, up 5 percent on the second quarter, and an average realised LNG and gas price of $10.45/mmBtu, 18 percent higher than in the previous period, he said.

LNG World News Staff