Oil Search Ltd. hurt by Papua New Guinea quake

Production and revenue both declined from the fourth quarter following a February quake that caused widespread devastation and loss of life.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  April 17, 2018 at 8:42 AM
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April 17 (UPI) -- A major earthquake in Papua New Guinea is partly to blame for a 24 percent loss in revenue and a 36 percent loss in production, Oil Search said Tuesday.

Oil Search is a partner in a liquefied natural gas facility and oil production in Papua New Guinea. In a report on operations through March 31, the company said its first quarter production of 4.84 million barrels of oil equivalent was 36 percent lower than fourth quarter 2017

"This reflected the shut in of Oil Search-operated production and the PNG LNG project following the 7.5 magnitude earthquake that struck the PNG highlands on Feb. 26," the company stated.

Exxon Mobil said Friday that one train -- the part of its plant that turns gas to liquid -- is back in service. The second train will restart once the plant's production increases.

Exxon shut down much of its infrastructure and evacuated non-essential personnel from the areas impacted by the quakes. Oil Search said some of the transit infrastructure, bases and a refinery were damaged, but "the operating facilities generally withstood the earthquake well, with no loss of oil or gas containment identified."

The company added, however, that while production was disrupted, there was no impact on plans to expand LNG activities. A total of three trains are expected in the LNG development concept.

Nevertheless, Oil Search said its insurance loss adjuster outlined an initial estimate for damages to its assets at between $150 million and $250 million.

The International Monetary Fund said the economy in Papua New Guinea had "slowed sharply." More than 270,000 people still need humanitarian assistance following the quake. Oil Search said about 200 people died as a result of the quake and many residents are without basic necessities.

The company has contributed about $5 million in cash to support disaster relief efforts.

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