Oil Search profit falls by 8pc

The National Business

OIL Search recorded an 8 per cent decrease in profit last year compared to the previous year.
The net profit was US$312.4 million (K1.039bil).
The key drivers include:

  • An 11 per cent increase in hydrocarbon sales, with 2018 production impacted by the Highlands earthquake;
  • An 11 per cent decline in realised oil and condensate prices and 5 per cent lower realised LNG and gas prices, reflecting weaker global energy prices;
  • A 27 per cent higher depreciation and amortisation charges due to the increase in production and the impact of applying the new International Financial Recording Standards (IFRS )16 leases accounting standards; and,
  • A 29 per cent drop in exploration costs expended, reflecting lower exploration spent in Papua New Guinea.

Former managing director Peter Botten said that “despite downtime while damage to the offshore liquids loading buoy was repaired and scheduled maintenance that took place at the PNG LNG plant site, total production was 11 per cent above the prior year, which was impacted by the Highlands earthquake”.
“This was driven by excellent performance from PNG LNG, which produced the highest rate since the project came on-stream in 2014,” he said.
Botten said 111 LNG cargoes were sold, compared to 99 in 2018.
Of the 111, 100 were sold under contact and 11 on the spot market.
“In addition, 14 cargoes of Kutubu blend and 11 of naphtha were shipped during the year,” he said.
“Higher product sales were partially offset by lower sales prices, reflecting the downturn in the global energy market.
“The average realised oil and condensate price fell 11 per cent, while the average LNG and gas price declined by 5 per cent, resulting in total revenue of US$1.58 billion (K5.26bil), 3 per cent higher than in 2018.”
Meanwhile, Dr Keiran Wulff has taken over from Botten as managing director of Oil Search.
Oil Search chairman Richard Lee in a statement said Botten who had stepped down from the board as well, would leave Oil Search on Aug 25.
“The material terms of Wulff’s employment agreement and remuneration arrangements are disclosed in the last Oct 1 ASX announcement,” Lee said.
“The board welcomes Wulff as managing director to lead the company as it embarks on its next phase of growth and strategic transition.”