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Monday, March 30, 2020
Australian oil company Cairn Energy announced that in light of current market condition, it has had to review each of its assets and related capital expenditure programs. As a result, significant reductions and deferrals have already been identified for its 2020 program, representing an overall 23% reduction in capital expenditure for the year.
The company reported that further initiatives relating to the whole forward program are under active discussion with joint venture partners and other stakeholders but added “these changes are not expected to impact our previously disclosed production and production cost guidance for 2020.”
Simon Thomson, Chief Executive Officer, Cairn Energy said; “The health and safety of our staff and contractors remains our primary focus in these challenging times. We have also moved quickly to adjust our forward capital program to current market conditions. Our balance sheet remains strong and we are proactively reviewing options for further capital expenditure savings and deferrals, while retaining the financial flexibility to add value on an ongoing basis.”
The Sangomar joint venture partnership is working collaboratively to assess several substantial initiatives to reduce and re-phase capital expenditure on the Sangomar Development Project. At this stage, based on initiatives already identified, Cairn’s expectation is that net capital expenditure on Sangomar in 2020 will be below $330 million, reduced from the original forecast of $400 million. A broader review of capital expenditure for 2020 and future years is ongoing with the joint venture, and an update on the results of that will be provided in due course.
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