PERTH (miningweekly.com) – Oil and gas major Santos on Friday downgraded its production guidance for the full year by some 3%, as the miner faced a number of issues.

Production for the full 2013 was expected to be between 52-million and 55-million barrels of oil equivalent, as opposed to the previous guidance of between 53-million and 57-million barrels of oil equivalent.

Santos said the revision was primarily owing to the deferred production from its Chim Sao operation, as it faced power system constraints, as well as natural field decline in Sangu and deferred Carnarvon oil production owing to poor weather, work-overs on Stag and the Mutineer-Exeter floating production and storage offloading (FPSO) unit.

Meanwhile, Santos on Friday also reported that production for the three months to June had declined by 5%, compared with the previous corresponding period, to 12.4-million barrels of oil equivalent.

Gas production of 51.7 PJ was also 6% lower than the previous corresponding period, with higher production from the Darwin liquefied natural gas (LNG) project being offset by lower production in the Cooper and Carnarvon basins, as well as lower production from Indonesia.

Santos CEO David Knox noted that, despite the decline in production, the company had continued to achieve a number of milestones across its business during the quarter under review, building the foundations for future growth.

“We’ve delivered the Fletcher Finucane project within budget and ahead of schedule, announced gas discoveries at the Bassett West, Bianchi and Winchester exploration wells, and increased our Cooper basin acreage.”

Knox noted that the Gladstone LNG project was also over 60% complete, with the first LNG tank roof raise completed, first modules installed and the marine crossing tunnel progressing ahead of schedule.

“This quarter also saw us finalising the first significant bilateral agreement between Queensland’s LNG projects, linking the Gladstone and the Queensland Curtis LNG projects’ pipelines. This agreement will allow for improved flexibility and efficiency in our operations and demonstrates the potential of collaboration.”

Knox added that the Papua New Guinea LNG project also remained on track to deliver its first LNG cargo by 2014, providing a substantial boost to Santos’ production.