|
Business |
Oil Search revenues hit K2bil in ’06
But total receipts
fall 3%, oil output declines16%
By BIBIAN BARRENG
SIGNIFICANTLY higher oil prices were unable to offset a drop 16%
drop in oil production, causing total revenue for Oil Search to
fall by 3% to US$640 million (K2 billion) last year.
The sale of assets to AGL earlier in the year had partly
contributed to the lower production of 9.2 million barrels, but
the company finished the year with an even stronger balance sheet
as a result of strong cash flows.
Production was anticipated to increase to between 10.5 million and
11 million barrels this year with a new drilling programme at
Kutubu and debottlenecking of facilities at Moran expected to
mitigate a declining oil production trend.
Oil Search share prices rose by A$0.09 yesterday to close at
A$3.47.
In its December quarterly report, Oil Search managing director
Peter Botten said the company had a cash position, net of debt, of
US$467.9 million (K1.5 billion) compared with US$67.4 million
(K211.95 million) at the beginning of last year.
Mr Botten said total sales revenue of US$628 million (K1.97
billion) was marginally lower than the record revenues of 2005,
despite the sale of assets to AGL at the beginning of the year, a
number of mainly weather-related operational incidents, and a
production adjustment following the establishment of the Greater
Moran Unit.
Mr Botten said despite production interruptions, total PNG oil
production had risen by 4% last year, attesting to the remaining
potential of the country’s mature oil fields.
Oil prices for the year averaged US$67.45, compared with US$58.12
a barrel in 2005, as a result of strong market demand for PNG’s
light sweet crude.
He said a premium to the Tapis oil price had been received for the
Kutubu benchmark crude especially since Oil Search took over the
marketing of its own crude in the final quarter of 2006.
Sales revenue for the fourth quarter of 2006 was US$171.3 million
(K538.7 million), 19% higher than in the third quarter.
The strong fourth quarter took total sales revenue for last year
to US$628.2 million (K1.98 billion), only 2% lower than the record
level reached in 2005 of US$638.4 billion (K2 billion).
Meanwhile, fourth quarter oil sales were 2.76 million barrels
compared with oil production of 2.42 million barrels, bringing
sales and production for the year broadly into balance.
The average oil price achieved for PNG crude was US$61.33 per
barrel, 15% lower than in the third quarter reflecting the fall in
global oil prices.
However, the average oil price for sales from PNG and Yemen was
16% higher than in 2005, at US$67.22 per barrel (US$58.06 per
barrel in 2005).
Mr Botten said Oil Search would spend about US$190 million (K597.5
million) on exploration and appraisal this year and US$120 million
on producing fields. An additional US$65 million (K204.4 million)
will be spent on rig purchases and US$20 million (K62.89 million)
on gas.
At the beginning of this year, he said, five exploration wells
were being drilled in Egypt, Yemen and Iraq in addition to the
Juha 5 well in PNG.
 
|
