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Oil Search 2Q17 output falls, but output from PNG LNG in June rises

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According to Reuters, Oil Search Ltd has announced that its 2Q17 output had fallen from its 1Q17 output due to maintenance, but added that production in June at the Papua New Guinea LNG (PNG LNG) project had hit a new record.

In June, the project reportedly produced 8.65 million tpy of LNG. This is 25% more than the project’s nameplate capacity. Reuters claims that ExxonMobil is marketing 1.3 million tpy of additional LNG on behalf of all owners. Peter Botten, Oil Search Managing Director, reportedly said that this could take total contracted plant volumes to 7.9 million tpy.

Existing customers of the project include CPC Corp., Tokyo Electric Power Co., Osaka Gas Co. and Sinopec.

Oil Search reported that 7.24 million boe was produced in 2Q17. This is compared to 7.57 million boe in 1Q17, and is reportedly due to maintenance activities at its operated facilities and at the PNG LNG plant.

Oil Search is still reportedly expecting to produce 28.5 – 30.5 million boe this year. Total revenue in 2Q17 was US$332.5 million, compared to US$343.7 million in 1Q17.

Reuters claims that Oil Search is expecting production costs for 1H17 to be in the lower half of its full year guidance range of US$8/boe – US$10/boe. It is likely that 2H17 costs will be greater because of the timing of major work programmes.

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