Oil Search reveals start of corporate restructure
Updated: Jun 15, 2019
OIL Search Ltd has commenced a corporate restructure to ensure the company has the right talent to deliver its growth objectives, chairman Richard Lee says.
Lee said Oil Search had never been in a better position to continue providing attractive returns to shareholders into the future.
This forecast is driven by the immense potential of the Papua LNG and P’nyang gas field developments in Papua New Guinea and the Pikka Unit oil development in Alaska.
In his address to shareholders at the company’s annual meeting recently, Lee said Oil Search had grown from a tiny exploration company to a regionally significant oil and gas producer and exporter.
“Oil Search enters 2019 in a strong operational and financial position,” he said.
“Our attractive growth opportunities in PNG and Alaska have the potential to double Oil Search’s annual production by the middle of the 2020s.
“I stress that this is a highly value accretive production, low on the global cost curve, which will deliver significant upside to shareholders, governments and local communities in PNG and Alaska.”
Lee said a management reorganisation and corporate restructure had commenced to ensure the company had the right talent, experience, accountabilities and reporting lines to execute and deliver its ambitious growth objectives.
He also spoke of the devastating PNG highlands earthquake.
“Everyone here will recall the February 2018 severe earthquake. Tragically, many lives were lost, housing and essential infrastructure destroyed, and livelihoods of people in the region were impacted significantly,” Lee said.
“Being one of the few organisations on the ground with the ability to help, Oil Search immediately mobilised a team to assist our local communities.
“Fifteen months on, the company in partnership with Oil Search Foundation continues to provide recovery assistance to impacted communities.”
Lee thanked all Oil Search employees and contractors who displayed: “courage and commitment in very challenging conditions in bringing operated production back on stream safely and efficiently with zero incidents and no loss of hydrocarbon containment.”
While sales volume fell 17 per cent due to the earthquake, this was offset by stronger global energy prices. Oil Search delivered a 2018 net profit of US$341 million (K) – 13 per cent higher than the previous year and generated a healthy operating cash flow of US$855 million.
It also maintained tight discipline on capital management ending the year with liquidity of US$1.5 billion.
Peter Botten, Oil Search managing director, echoed Lee’s sentiments adding the prospect has never been brighter in bringing value to all shareholders.
“We have a tremendous opportunity to build the business over the next four to five years,” he said.
“There is new high returning identified growth opportunities. The complexities and challenges to deliver these prospects and projects are real but we are building the company to appropriately address them and I believe we can deliver.
Shareholder Sam Abal, a former member of parliament and former deputy prime minister, commended Botten’s leadership style.
“I’m very impressed with Peter Botten for bringing the company to this stage,” he said.