Oil and gas producer Santos has cut its production forecasts due to problems caused by supply, weather and infrastructure.
Drilling in the Cooper Basin was also suspended after a fatal accident.
Santos has reduced its 2013 production guidance to 52-55 million barrels of oil equivalent (mmboe), down from 53 to 57 mmboe previously.
It said the revision was due in part to deferred oil and gas production from the Chim Sao oil field in Vietnam due to problems with its offshore production and shipping facility.
Other factors contributing to the decline included natural field decline in Sangu, off Bangladesh, and deferred oil production in West Australia’s Carnarvon Basin, due to poor weather.
The company said all other guidance is maintained, “however production costs are expected to be at the upper end of the range”.
Santos Chief Executive Officer David Knox said that Santos continued to achieve significant milestones across the business during the quarter.
“This quarter also saw us finalising the first significant bilateral agreement between Queensland’s LNG projects, linking the GLNG and QCLNG projects’ pipelines,” he said.
“This agreement will allow for improved flexibility and efficiency in our operations and demonstrates the potential of collaboration.
“PNG LNG, our other major growth project, remains on track to deliver its first LNG cargo next year, providing a substantial boost to our production, and it is our intent to review capital management options as we approach PNG LNG production.”
Drilling activities in the Cooper Basin were put on hold after a fatal accident.
“Drilling activities were interrupted due to the suspension of drilling operations by Saxon Energy Services Australia Pty Ltd (Saxon) following a rig floor incident on Saxon Rig 185 in the Fairview field in Queensland, which tragically resulted in a fatality on 23 June 2013,” Santos reported.
“All drilling operations by Saxon in the Cooper Basin remained suspended at the end of the quarter, while internal and external investigations were conducted.
“It is expected that the Saxon rigs will resume operations by the end of July.”
Santos said it produced 12.4 mmboe in the June quarter, up two per cent from the previous quarter.
But gas production fell to 8.9 mmboe in the quarter, down six per cent from the same time last year, with higher production from its Darwin LNG facilities offset by lower production in the Cooper and Carnarvon basins and Indonesia.
Santos said it received $797 million in revenue during the June quarter, up eight per cent compared to the March quarter.
It said gas prices rose in the quarter, to reach a record average of $5.61 a gigajoule, driven by higher sales from Darwin LNG and higher gas prices in the Cooper Basin and Indonesia.
