OSL: Output to rise 400%

Business, Normal
Source:

The National, Tuesday February 4th, 2014

 By GYNNIE KERO

OIL Search Ltd will more than quadruple its production by next year.

Managing director Peter Botten (pictured) said this yesterday as he stressed that the company’s solid oil production needed to be increased further because of the PNG LNG project.

The company is the second largest shareholder in the gas project with a 29% stake after ExxonMobil.

Botten said this year was a big one for the company as it was nearing the sales of LNG mid-year.

He said: “We’ve (Oil Search) a solid oil production business since we started operating more than 10 years. 

“LNG project means we have to significantly increase our production — our first full year of production will be in 2015.

“But we will more than quadruple our production so we’ll move towards 27-28 million barrels of oil equivalent (mmboe) up from 6-7 mmboe by 2015.

“We believe we can produce, we should beat the record this year if projections are right, contributions from LNG and oil fields are substantial this year.

“But the highlight is the successful delivery of the PNG LNG project.

“There’s a massive increase in production and obviously that flows onto significant increase in revenue and profits.

“This is a good platform to reinvest in Papua New Guinea and other growth projects, which will provide long standing shareholders with steady and improved dividends.”

Oil Search is carrying out ongoing drilling at Mananda.

Botten said  seven wells were being drilled and they hoped  to make full decision (on Mananda) by end of this year, as it was a potentially reasonable size oil field and would increase the company’s (production) life for good.

He said Oil Search’s operations in Kurdistan and Taza were going well.

“We have substantive programmes both in PNG and overseas.” 

Botten said the drop in value of kina by another 10% as predicted by ANZ would have less impact on the company.

“Because oil and gas are sold in US currency, the flow on effect for our cost in kina becomes slightly cheaper. 

“It’s a minor positive for our business for the kina to drop a little bit it is also important that reinvestments we (Oil Search) make stimulates a strong PNG economy.”