Santos Ltd. (STO), Australia’s third-largest oil and gas producer, expects output to rise as much as 12 percent next year, driven by the start of a $19 billion natural gas project in Papua New Guinea.
Production will be 52 million to 57 million barrels of oil equivalent in 2014, the Adelaide-based company said today in a presentation. Santos said it will produce 51 million barrels this year, down from its October forecast that it would produce at the low end of a 52 million to 55 million barrel range.
Santos will receive a boost from Exxon Mobil Corp. (XOM)’s liquefied natural gas project in Papua New Guinea, which is scheduled to begin next year, and is looking to expand in the Pacific nation, Chief Executive Officer David Knox said today on an investor webcast. Santos also is building the $18.5 billion Gladstone LNG project in Queensland, one of seven under construction in Australia to meet Asian demand.
Production is projected to climb to 80 million to 90 million barrels by 2020, it said today. Santos’s operations include the Fletcher-Finucane oil project off Western Australia, the Chim Sao oil field in Vietnam and assets in central Australia’s Cooper Basin.
Santos dropped 1.6 percent to A$14.07 as of 10:22 a.m. in Sydney, while Australia’s benchmark S&P/ASX 200 Index fell 0.4 percent.
Today’s cut in the 2013 production forecast was the second time this year Santos had lowered its outlook. The company had originally forecast 2013 output of 53 million to 57 million barrels in November last year before cutting it in July, citing delays at projects in Asia and Australia.
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