PERTH (miningweekly.com) – Energy major Oil Search has reported a slight decline in production during the three months to September.

The ASX-listed company reported a total production of 6.81-million barrels of oil equivalent, down from the 6.88-million barrels produced in the previous quarter, while sales volumes also decreased from 6.74-million barrels to 6.47-million barrels.

Revenue for the quarter was also down by 5%, to $361.1-million.

The company told shareholders that production from the Papua New Guinea liquefied natural gas (PNG LNG) operation and the Oil Search-operated oil fields was curtailed during parts of August and September, owing to restricted rates of liquids loading following the detection of damage to one of the mooring chains at the offshore liquid loading facility in the Gulf of Papua.

“The PNG LNG project produced at a gross annualised rate of nearly 9 mtpa in July. However, in August and September, it was necessary to reduce project production rates for a short time when damage to one of the six mooring chains at the offshore liquids loading facility was detected. This prevented normal liquids loading procedures and consequently reduced ullage within the liquids storage system,” said Oil Search MD Peter Botten.

“Despite these production disruptions, annualised gross PNG LNG production for the quarter averaged 8.3-million tonnes a year, 20% above nameplate capacity, and the average annualised production rate for the nine months to September 30 was 8.5-million tonnes a year.”

Repair work was completed in mid October, with standard loading operations reinstated and production now ramping up to normal rates.

Botten said that owing to the offshore liquids loading facility issue, which negatively impacted production during the third quarter, production guidance for the 2019 full year had been revised to between 27-million and 29-million barrels of oil equivalent, from between 28-million and 31-million barrels of oil equivalent previously.

“Unit production costs are now expected to be between $12/barrel of oil equivalent and $13/barrel of oil equivalent, reflecting the lower production base, costs associated with the repairs to the mooring buoy and lower insurance receipts for earthquake remediation activities than previously anticipated. Other operating costs have risen marginally, to $140-million to $150-million, due to lower operator overhead recoveries, SE Mananda site restoration provisions and execution costs incurred for the Alaskan Option and sell-down process.”