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Oil Search raises output goal

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LNG Industry,

Bloomberg are reporting that Oil Search has raised its full-year production target because of record output from the country’s LNG project.

The company lifted the lower end of its 2017 production guidance to 29 million boe from the previous 28.5 million, while leaving the upper end at 30.5 million barrels, citing record output at PNG LNG.

Capital spending this year has been trimmed to a range of US$350 million to US$400 million from US$380 million to US$480 million due to cheaper drilling and synergies from working with Exxon Mobil Corp. on a planned LNG expansion. The Sydney-based company also said on 22 August that net income in the January-June period rose more than fivefold to US$129.1 million.

Oil Search, which owns 29% of the Exxon-led PNG LNG project, reported last month that first-half output slipped 1% to 14.81 million boe, while revenue gained 16% due to higher prices. The company also owns a 22.8% stake in the Papua LNG development which is being developed by Total SA and co-owned by Exxon.

The company last week said it expects to save more than US$5 billion over a 20-year period by routing gas from the Papua LNG project to the existing PNG LNG facility, rather than building a new greenfield plant. A preferred commercial model for the proposed LNG expansion is due in the fourth quarter of 2017.

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