Oil Search’s focus on performance, cost and capital allocation continued to deliver results in the December quarter last year, with record annual LNG production in Papua New Guinea (PNG).
Outlined in the company’s fourth quarter results, the production rate for 2020 from the PNG LNG project was 8.8 million tonnes (mtpa), the highest ever annual rate for the project.
However, total production for the quarter from the PNG LNG project was down from 8.9 mtpa in the third quarter to 8.7 mtpa.
“We are embedding sustainable cost reduction initiatives and enhancing operations across the company to drive improved performance over the longer term,” Wulff said.
“Despite the material challenges of 2020, PNG LNG continued to outperform in the fourth quarter, ending the year with its highest ever annual production 8.8 MT. The North West Moran oil field was brought back online during the quarter following a shut-in due to the 2018 earthquake.
“The recommencement of production was a great effort by all involved and resulted in a gross contribution of around 2500 barrel of oil per day (bopd), notwithstanding remote operation challenges and COVID-19 travel restrictions.”
Looking ahead, production for 2021 is expected to be lower than 2020 due to scheduled service programs for the PNG LNG plant for trains one and two.
The company highlighted that a major maintenance shutdown in the operated facilities, which occurs ever four years, is also planned to coincide with the PNG LNG programs to minimise impacts on production.
Investment expenditures for 2021 are expected to be in line with 2020, with the PNG LNG Angore development due to restart this year, along with front end engineering design (FEED) and other activities related to the Pikka development in Alaska, and pre-FEED costs associated with the LNG expansion of projects in PNG.
“Our developments are also regaining momentum. During the quarter, the PNG Parliament passed all remaining amendments to Its for Papua LNG fiscal stability,” Wulff said.
“We expect that 2021 will continue to be another challenging year and the company is absolutely focussed on maintaining the operation discipline that resulted in excellent results in 2020 despite the difficult conditions. Oil Search is increasingly well positioned to manage though uncertainly and deliver our projects in 2021 and beyond.”