Oil Search posts record half year gai

OIL Search Limited has posted record first half year revenue earnings of K1.266 billion ($US466.8 million).
This follows an increase in its operating revenue for the second quarter of 71 per cent or K798 million ($US294.2 million) over the first quarter earnings.
The company’s historic earnings is a 52 per cent increase from the previous corresponding period.
Average oil prices for Papua New Guinea crude increased by 44 per cent on the first quarter of this year to $US133.63 (K362) per barrel.
Oil Search managing director Peter Botten said: “Total oil and gas production for the second quarter of 2008 was 2.12 million barrels of oil equivalent, 4 per cent lower than in the first quarter, after recognising the disposal of all the company’s Middle East/ North Africa producing assets with effect from 1 May 2008.
“Oil production from PNG rose quarter on quarter, with continued good performance from the Kutubu and Gobe fields. Liftings of oil were higher than production during the period, with production and sales for the first half of the year broadly balanced by the end of June.”
Mr Botten said PNG’s crude oil continued to attract a premium over the benchmark Tapis crude price while global oil prices continued to strengthen over the quarter. He said this resulted in new oil price records being set for Oil Search, with an average oil price in PNG of $US133.63 per barrel compared to $US76.09 in the corresponding period of 2007 and $US92.79 in the first quarter of 2008.
“In May 2008, a key milestone was achieved for the PNG LNG project, with the signing of the gas agreement with the PNG Government and the subsequent decision by the project participants to move into Front End Engineering and Design (FEED),” he said, adding FEED activities were now on with completion expected in the third quarter of next year.
Key deliverables during this period include securing LNG market contracts; securing project debt funding; awarding construction and procurement contracts; executing a benefits sharing agreement and securing all final licence and environmental approvals.
“Following the announcement, project activities have significantly accelerated, with engineering and design work focused on optimising plant design. Targeted marketing of the LNG has also commenced, following a period of soundings and discussions with potential customers,” Mr Botten said.
He said a financing roadshow was now goin on, with already a good number of banks and export credit agencies showing interest.

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