Oil Search's 2019 Profit Down 8%

Sydney-listed Oil Search’s net profit after tax during the 12-months to December 31 was US$312.4mn, down 8% yr/yr, largely due to the fall in global energy prices, the company said February 25.

Average realised oil and condensate price was US$62.86/b, down 11% yr/yr while average realised LNG and gas price was US$9.58/mn Btu, down 5% yr/yr, Oil Search said. Revenue during the year was up 3% yr/yr to US$1.58bn.

PNG LNG produced at the highest rate since the project came onstream in 2014, Oil Search said. The project sold 111 LNG cargos last year compared with 99 in 2018, of which 100 were sold under contract and 11 on the spot market.

Commenting on the P’nyang gas agreement, Oil Search said “both ExxonMobil and Total have indicated their support for renewed discussions with the government, as all project proponents, including Oil Search, believe that the existing proposed three-train development is the most efficient way to develop Papua LNG and P’nyang and creates the most value for stakeholders, including the PNG government and the people of PNG.” Earlier this month government of PNG called off negotiations on the P’nyang gas agreement.

The cancellation of the talks puts in doubt PNG’s plan to significantly expand its LNG exports in the coming years. Oil Search, ExxonMobil, and France's Total have been working on developing the proposed Papua LNG project and the expansion of the existing PNG LNG plant. The proposed expansion of PNG’s LNG production and export capacity was dependent on the successful conclusion of the P’nyang gas agreement.

“Oil Search is working closely with our partners and the PNG government, to help facilitate re-engagement on the P’nyang gas agreement and ensure that the integrated three-train development proceeds into Feed in a timely manner,” Oil Search said.