Santos reduces 2025 production forecast on technical issue at Barossa Project
Santos Australia has lowered its output forecasts for the second time in this year after a technical problem delayed ramp-up at its Barossa project. Inclement weather also hampered recovery of the Cooper Basin project.
No. 2 independent oil and gas producer in the country now expects to produce 89-91 million barrels of oil equivalent (mmboe) during fiscal 2025, compared with 90-95 mmboe previously forecast. The country's no. Visible Alpha's consensus forecast of 91.4 million barrels of oil equivalent (mmboe) was not met by the mid-point of this forecast.
According to a company guide for 2024, the Barossa Project is a joint venture between Santos, South Korean energy giant SK E&S, and Japan's JERA. It is estimated to cost $4.5 to $4.6 billion in order to develop.
It is on track to deliver its first LNG cargo during the quarter ending December.
In a statement, Kevin Gallagher, Managing Director and Chief Executive Officer of BW Opal FPSO said that software issues affecting safety systems caused an unplanned shutdown for around two weeks in September. This affected the ramp-up of Barossa Project.
Santos's full-year production projections were reduced in the quarter prior to this due to operational disruptions caused by flooding at Cooper Basin.
The firm stated that recovery effects in Cooper Basin will continue into the fourth quarter due to the flood waters receding slower than expected.
Gallagher said that the flooding in Cooper Basin, which submerged over 200 wells last May, would have a minimal impact on the "bigger picture". Production is expected to increase in the second half.
Santos reported a 11% drop in revenue for its third quarter ending September 30. This was below the Visible Alpha forecast of $1.18 Billion.
Adelaide-based company has also reduced its forecast for annual sales to 93 to95 mmboe, from the 92 to99 mmboe that was previously expected. Visible Alpha's consensus was 96 mmboe. The midpoint of the range fell below that.
Santos shares ended the session 0.8% higher, at A$6.38, matching the gains of the benchmark S&P/ ASX 200 Index. They had risen as high as 1.7% in the previous session. Reporting by Shivangi lahiri in Bengaluru and Sherin sunny; editing by Shreya biswas and Subhranshu sahu
(source: Reuters)