Santos profit down $181m
Sydney Morning Herald
Friday August 21, 2009
SANTOS says plans to sell more liquefied natural gas from its $8 billion Queensland project are well advanced and that it is "very focused" on interested customers in Japan.The chief executive of Santos, David Knox, made the comments as he released the company's first-half results for the year to June 30, which revealed an underlying profit to $102 million, down from $283 million during the previous corresponding period.The result was double market expectations.Mr Knox said a 39 per cent drop in the average price of oil had reduced sales revenue to $1.02 billion from $1.38 billion in the first half of 2008. That was partly offset by higher gas prices and a weaker Australian dollar.Oil production fell 4 per cent to 26.6 million barrels of oil equivalent for the June half and Santos said it would retain its guidance for the full year of 53-56 million barrels of oil equivalent.Mr Knox said Santos was keen to begin work on a second "LNG train" (a liquefied natural gas plant's liquefaction and purification facilities) at Gladstone and that a final investment decision could be made next year. He said there were 15 potential buyers for Gladstone gas in Japan."We have a very good relationship with them," Mr Knox said. "We will be marketing gas for the second train particularly as part of an equity sell-down ... from 60 per cent to 51 per cent on the Gladstone project."Santos has already signed a two-train binding agreement with joint venture partner Petronas to supply 3 million tonnes a year over 20 years in a deal Mr Knox said was "probably the biggest of the lot".ExxonMobil this week signed a deal it says is worth $50 billion to the state-owned PetroChina.Mr Knox said Santos remained the frontrunner for the Queensland LNG space, but that he would welcome consolidation among the four main players."There are collaboration opportunities. If we were able to do it it will improve capital efficiency," he said. "We have space for five trains and we are planning on two at this stage ... we will just have to see if anyone wants to join us."Mr Knox said this week's $US370 million ($445 million), 60 per cent sale of three Timor Sea gas fields to France's GDF Suez would further strengthen Santos.However, he said no costings had been done on a floating LNG project, known as Bonaparte LNG, and that the first gas would be available sometime after 2014.An interim dividend of 22c was declared, in line with the previous period. Shares in Santos finished 6c lower at $14.65.
© 2009 Sydney Morning Herald
