He told the company’s annual meeting last Friday that it was fortunate that Oil Search was in a strong position operationally and financially to manage a “lower for longer” price scenario, especially with the company’s potential growth projects in the P’nyang and the Elk/Antelope fields in the Gulf, being competitive in a global context and in a lower oil price environment.
“Our capital expenditure obligations have fallen substantially, now that almost all PNG LNG projects construction is complete, and both the PNG LNG project and our cash balance as at the end of March has risen to over US$1bn (K2.6bn),” Lee said.
“And we have US$750m (K2bn) of additional funding available through our corporate credit facilities, giving us adequate liquidity to fund our key growth opportunities.
“During 2014 we undertook a major strategic review, covering all aspects of the company’s structure, operations and human resources.
“In light of the sharp fall in oil prices, in early 2015, the results of this review were reassessed.
“The conclusion of this work was that the key recommendations and directions set by the 2014 Strategic Review remain sound,” he said.
Lee said however the company was being mindful, seeing the period of low oil prices as an opportunity to improve on key business areas.
“As it’s impossible to predict if and when oil process will return to previous levels, our planning for 2015 and beyond is based on an assumption that lower prices will prevail for some years.” The National/PMW