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Price of Oil Recovers in Spite of COVID

by PNG Business News - April 08, 2021

According to Oil Search, oil prices have risen steadily in recent months from the initial effect of the Covid-19 last year, when prices ranged about US$43 (K150) per barrel of oil (bbl), to levels above US$60/bbl (K210) since February this year.

In response to questions, a group spokesperson said,“ To date, there has been no impact to production in our Oil Search operations in PNG as a result of the recent surge in the Covid-19 cases. The increase in confirmed Covid-19 cases in PNG has prompted Oil Search to enact its crisis and emergency management plans. The health and safety of our employees remain the company’s highest priority and teams have been assembled in PNG and Sydney to deploy additional support to protect our people and to ensure the safety and reliability of our operations. At our PNG field locations, we continue to operate under precautionary protocols established in 2020, which includes redeployment of non-essential personnel, restriction of access and travel to field locations and implementation of strict preventative measures and quarantine zones.”

He added, “We have enacted additional risk mitigation measures include establishing ‘cocoons’ for our field teams and extending the quarantine period for employees and contractors. To date, there has not been a single positive case recorded in our operating sites outside of quarantine. We have also conducted more than 7,500 Covid-19 tests at our medical clinics and quarantine facilities in PNG. Beyond the safety of our own people and assets, Oil Search stands ready to work with relevant Government and health authorities to assist in PNG’s overall response to the Covid-19. This includes the dissemination of accurate information around the Covid-19 and vaccinations, supporting provincial health authorities to implement an effective vaccination programme, and providing logistics and cold chain support where required and as directed by the Government.”



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PNG Business News - February 15, 2021

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Oil Search has brought a strong financial year in 2020 with a core net profit after tax of US$22.0million (K77m), also reported to a full-year production of 29.0 mmboe and the strongest safety performance since assuming operatorship in 2003.The financial results were significantly lower realised hydrocarbon prices in 2020 as compared to 2019, which resulted in a full-year net loss of US$320.7 million (K1.1bn). This includes a post-tax impairment charge of US$260.2 million (K908.7m) that had been recognised in the interim financial results.For managing director Dr Keiran Wulff, “Oil Search emerged from 2020 stronger and more resilient as a result of its response to the Covid-19 pandemic, demand collapse and oil price downturn. Despite the material challenges, Oil Search achieved three important records for the year. The first is the strongest safety performance in PNG since becoming the operator of the PNG oil fields in 2003, with a total recordable incident rate of 0.78 per million hours worked, and no Tier 1 process safety events.”According to Wulff, the second is the strongest production reliability from its operations in PNG since the 2018 earthquake and, the delivery of record annual production from the PNG LNG project.He said that the company brought down some decisive actions. “We also undertook a major strategic review to prioritise activities and capital spend for a low carbon future,” he said. “This resulted in streamlining our portfolio and incurring a non-recurring, post-tax impairment charge of US$260.2 million (K908.7m). We are a more focused, leaner and lower cost resilient business in a strong position to commercialise our world-class resource base and leverage the oil price. We will continue to focus on maximising operating cash flow and delivering material growth projects which will be underpinned by resilient operations and disciplined capital management. We have set up a dedicated transformation team to embed a high-performance culture across the business.”

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