Santos Sales Decline 4%; Kipper Gas Output Delayed to First Half of 2012
Santos Ltd., Australia’s third- largest oil and gas producer, said third-quarter sales dropped 4 percent as output fell. Production from the Exxon Mobil Corp.- operated Kipper gas project has been delayed.
Sales declined to A$535 million ($525 million) in the three months ended Sept. 30, Santos said in a statement to the stock exchange today. Production slipped 9 percent from a year earlier to 12.9 million barrels of oil equivalent after flooding in Australia’s Cooper Basin disrupted rig operations.
Kipper, off the southeast coast of Australia, where Santos owns a 35 percent stake, is now expected to start producing gas in the first half of 2012, as opposed to next year, the Adelaide-based company said. Exxon is developing the Turrum and Kipper projects in the Bass Strait together, at an estimated cost of almost A$3 billion. Exxon owns 32.5 percent of the venture and BHP Billiton Ltd. the remaining 32.5 percent.
A design review at the Turrum venture, now nearing completion, will likely have “schedule impacts,” for Kipper, Santos said. The shares dropped 0.2 percent to A$12.43 at 12:31 p.m. in Sydney, compared with a 0.5 percent advance in the benchmark S&P/ASX 200 Index.
Santos maintained its 2010 production guidance at 49 million to 52 million barrels of oil equivalent. It cut projected spending to A$2 billion from A$2.3 billion, reflecting the timing of investment at an Exxon-led $15 billion Papua New Guinea liquefied natural gas venture.
Santos trails BHP and Woodside Petroleum Ltd. among Australian oil and gas producers.
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