OSL profit plunges

Business, Normal

MELBOURNE: Oil Search Ltd is looking to the massive Papua New Guinea liquefied natural gas (LNG) project to generate growth, after revealing a sharp fall in calendar 2009 profit due to falling oil prices and lower sales.
Oil Search said the US$15 billion (K41 billion) PNG LNG project could eventually be built up to have four trains, greatly expanding its original capabilities.
“The story about Oil Search is very much around PNG LNG, not just this project, but also what we are doing in terms of medium-and-long-term growth around that project,” chief executive Peter Botten said in a teleconference yesterday.
The ExxonMobil-led PNG LNG joint venture is expected to begin production in 2014, and Oil Search holds 29% stake in the project.
Two gas trains were expected to be built for PNG LNG, but the company said there might  be sufficient resource base to underwrite another two trains.
Early plans are for a third train to be built in late 2015 or early 2016, Botten said, with a fourth train possible.
“There are a range of opportunities and a range of synergies that come from PNG LNG if you are able to do a further development in that time frame,” Mr Botten said.
Oil Search, Papua New Guinea’s biggest oil producer, posted a net profit of US$133.68 million (K365.37 million), down 57.3% from US$313.36 million (K858.52 million), in 2008.
“The profit decline was primarily due to a 35% fall in the average realised oil price combined with 7% lower oil sales,” the company said in a statement.