PERTH (miningweekly.com) – Oil and gas major Santos has reported record annual production for the year ended December, with production reaching the top-end of the company’s previously upgraded guidance.

Annual production reached 89-million barrels of oil equivalent in the 12 months to December, an 18% increase on the 2019 figures.

Santos on Thursday also reported record quarterly production for the three months to December, with the company producing 25.4-million barrels of oil equivalent, up 1% on the previous quarter.

Sales volumes also increased by 7% on the previous quarter, to reach a record 31.1-million barrels of oil equivalent, contributing to record annual sales volumes of 107.1-million barrels of oil equivalent to generate revenues of $3.4-billion.

Sales revenue for the fourth quarter was up 16% on the last quarter, to $922-million, both as a result of the higher sales volumes, and stronger liquefied natural gas (LNG) prices.

“Our consistent and successful strategy combined with the disciplined, low-cost operating model continues to drive strong performance across our diversified asset portfolio and position us for disciplined growth,” said Santos MD and CEO Kevin Gallagher.

“2020 saw us ride through the bottom of the cycle while still generating free cash flow, and deliver a record 4.3-million tonnes of Santos equity LNG sales. We remain focused on controlling our costs and living by our disciplined operating models so we are set up to sustain our base business and remain resilient through the cycle, even as we see the welcomed strengthening in the prices over the past months.”

Gallagher noted that significant milestones were achieved on the Barossa project during the fourth quarter, including the signing of a binding long-term LNG offtake agreement with Mitsubishi at a price based on Japan Korea Marker and execution of the gas transportation and processing agreements with Darwin LNG.

Consents were also received for our sell-downs to SK E&S. Barossa is on track for a final investment decision in the first half of 2021.

“We also announced in December an ambitious roadmap to net-zero emissions by 2040, new emissions reduction targets and a commitment to work with our customers to reduce their emissions. Our Moomba carbon capture and storage (CCS) project is now final investment-decision-ready, subject to eligibility for Australian Carbon Credit Units,” said Gallagher.

The Moomba CCS project will have the capacity to safely store 1.7-million tonnes a year of carbon dioxide deep underground in depleted natural gas reservoirs, subject to government approval regarding the eligibility for Australian carbon credit units.

Meanwhile, looking ahead to 2021, Santos is expecting full-year production to range between 84-million and 91-million barrels of oil equivalent, while sales volumes would range between 98-million and 105-million barrels of oil equivalent, with the company planning to spend some $900-million in the base business and some $700-million for major growth projects.