Falling oil prices put the Government in a difficult situation, economist Dr Ronald Ramkissoon said yesterday. Commenting on the decision by OPEC not to reduce output, he said: "An oil economy must
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Repsol spends €61 million capex in Q2 in T&T
Spain’s largest oil and gas company, Repsol, spent approximately €61 million ($536 million) in capital expenditure in T&T in the second quarter (Q2) of 2014, according to the company’s 2Q 2014 results, which were released on Thursday.
“Capital expenditure in upstream in the second quarter of 2014 amounted to €691 million, which represents a year-on-year growth of 14 per cent; development capital expenditure accounted for 59 per cent of the total investment and was concentrated in the USA (29 per cent), Venezuela (22 per cent), Brazil (17 per cent), T&T (15 per cent), and Bolivia (8 per cent).
Exploration capital expenditure represented 31 per cent of the total and was earmarked primarily for the USA (32 per cent), Russia (13 per cent), Brazil (13 per cent), Namibia (12 per cent), Iraq (8 per cent) and Angola (4 per cent),” the company said in its results.
Overall, Repsol reported a 95 per cent rise in Q2 profit, boosted by the sale of stock in its former Argentine unit and bonds the company received in compensation for its nationalisation. Net income rose from €267 million in Q2 2013 to €520 million in Q2 2014. However, adjusted net income, which excludes gains or losses in the value of inventories and one-off items, fell 2.7 per cent year-on-year to €390 million from €401 million in the year-ago period. The adjusted result still was far above analyst consensus of €279 million.
Total Q2 production fell 5.8 per cent year-on-year to 338 million barrels of oil equivalent per day (boe/d), as output that ramped up in Bolivia, Peru and other parts of the world helped offset a lack of output from Libya.
“Upstream production averaged 338,000 boe/d in the second quarter of 2014, down 6 per cent from a year ago. The connection of the second and third productive wells in Sapinhoá (Brazil) in February and April 2014, the production start-ups in the Kinteroni field in Peru at the end of March 2014, Phase II of Margarita in October 2013 and SK in February 2013, as well as the continuous ramp-up of production in the USA, could not offset the interruption of production in Libya due to security issues, and the stoppages in T&T due to drilling activity and maintenance.
“Stripping out Libya, production in the second quarter of 2014 was more than 5.0 per cent higher year-on-year,” the company said.
In the upstream, adjusted net income in the second quarter of 2014 stood at €145 million, 49 per cent lower year-on-year. The main cause for the decrease was the interruption of production in Libya for security reasons, which had an impact of €261 million at the operating income level and of €88 million in the adjusted net income level.
The factors, apart from the Libya effect, which explain the year-on-year performance, were: higher production in Brazil, the USA, Russia, Bolivia, and Peru, offset the drop in production in T&T, and had a positive impact on the operating income of €73 million.
Crude oil and gas realization prices (how much the company actually made), net of royalties, improved operating income by €71 million. Higher exploration costs, led to a decrease in the operating income of €167 million, mainly due to higher bond costs and higher amortisation of wells.
Repsol said that in Q2 2014, three explorations wells were concluded with a negative outcome: Welwitschia: 1 in Namibia, Ouguiya: 1 in Mauritania and Binari Serwan:1 in Kurdistan.
Additionally, two more wells have been considered as negative: Anchois in Morocco (2009) and Kachemach: 1 in Alaska (2012), previously under evaluation, due to a lack of economic viability.
Higher depreciation and amortisation charges, mainly in Russia, Brazil, Bolivia and T&T, reduced operating income by €13 million. Dollar depreciation against the euro negatively impacted the operating result by €12 million, Repsol said. According to the results, “Higher income tax expense had a negative impact of €5 million. Income of equity affiliates and non-controlling interests and ‘other’ explain the remaining differences.”
The company also reminded investors that on July 3, (2014) Repsol announced a new hydrocarbons discovery in the Teak field, offshore T&T, in the TSP block east of the island of Trinidad. The find, Repsol said, in the TB14 well has upgraded the northern portion of the Teak B field that was not known to exist before.
Repsol operates the field with a 70 per cent interest, partnered by co-venturers Petroleum Company of Trinidad and Tobago (Petrotrin) and the National Gas Company of T&T (NGC), with a 15 per cent stake each.
Repsol said: “The TB14 well, which has produced 1,200 barrels of oil a per day (bopd) in testing, adds to the start-up in June of the TB13 well, which added 1,384 bopd to the field’s output. The production of the new wells equals 17 per cent to the block’s existing production in 2013, which averaged 14,834 bopd gross.”