Pandemic puts firm on alert

THE unprecedented challenges due to the Covid-19, consequent disruption to the global economy and decline in oil prices in the first half of this year have been catalysts for reassessing all areas of Oil Search’s business, managing director Keiran Wulff said on Tuesday during presentation of 2020 half year result.
He said due to the impact of Covid-19 on the global economy, the market window for major new LNG supply has moved back a few years.
“This delay and the requirement to focus on lowest cost projects resulted in all major LNG companies globally revisiting the timing and sequencing of new LNG projects,” he said.
“Given the proven world-class performance of PNG LNG, its proximity to markets and relatively low cost, we remain confident in the long-term outlook for our high quality LNG expansion projects in PNG.”
Wulff said steps had been taken in the first half of this year to strengthen the company’s balance sheet which included a 40 per cent reduction in 2020 capital expenditure to conserve cash and a US$700 million (K2.44b) equity raise to increase available liquidity.
“We are comfortable that the balance sheet can support the company’s liquidity needs in the event of a prolonged period of low oil prices.”