The recently commissioned Queensland Curtis LNG (QCLNG) facility, the prospective completion of Australia Pacific LNG (APLNG) and Santos GLNG towards the second half of the year, and the subsequent opportunities this will bring for the Australian east coast gas market mean the outlook for local gas is not as dire as initial forecasts may suggest.
While many oil and gas companies are reining in their spending and adopting a conservative stance when it comes to new projects, a majority of them continue to invest in their core operations.
Senex Managing Director and Chief Executive Officer Ian Davies says the company is not walking away from its aspirational 2018 fiscal year targets of 3-5 MMboe* oil and gas production and 100-150 MMboe* net 2P reserves. He says the company will continue to move its key growth projects along, and that it has allotted $85-$90 million of capital spend in the 2015 fiscal year to sustaining core operations, exploration, and progressing high-reward growth projects.
Mr Davies remains optimistic and says any Australian oil and gas operator would be well aware of the cyclical nature of the industry.
“Political and economic challenges will come and go; it’s part of doing business in the energy sector. We continue to see strong fundamentals for the east coast Australian gas market – given the expected unprecedented demand growth, supply pressures, and available infrastructure.”?
In a word of advice, Mr Davies says gas operators should go back to the basics of what they can control – a healthy cash position, careful spending and efficient operations.
*Not market guidance