(Adds quotes, plans for Sverdrup)
OSLO, July 29 (Reuters) – Swedish oil firm Lundin Energy , a partner in Norway’s giant Johan Sverdrup oilfield, said on Wednesday its operations were returning to pre-COVID-19 levels, after reporting a worse-than-expected operating profit for the second quarter.
Earnings before interest and tax (EBIT) fell to $166.1 million in the second quarter from $279.8 million a year ago, lagging the $198.9 million seen in Refinitiv poll.
The company, however, said its operations were returning to the normal levels seen before the COVID-19 pandemic, which sent oil prices crashing to the lowest levels in more than two decades in April.
“As we enter the second half of the year, all offshore facilities have returned to normal manning levels and the projects are progressing on plan,” CEO Alex Schneiter said in a statement.
Exploration activities would resume in the fourth quarter, he added.
Lundin, which has a 20% stake in Sverdrup, maintained its 2020 output guidance at 157,000 barrels of oil equivalent per day (boepd), after producing a record 162,900 boepd in the second quarter.
The Equinor-operated Sverdrup oilfield, western Europe’s largest, ramped its output to 470,000 boepd in April, more than previously expected, and will test a further upside potential in the second half of the year, Lundin said.
Sverdrup’s Phase 2 development, expected to boost the field’s output to a total of 690,000 boepd, was on track to start at end-2022, it added.
The company also said it had identified up to eight potential new projects targeting over 120 million barrels of oil equivalent in resources, which could be helped by the tax incentives approved in June by the Norwegian parliament to support the oil industry.
“We will be aiming to accelerate appraisal activities and field development studies for all of these potential projects, with the objective of maturing them to sanction prior to the deadline at the end of 2022,” it added.
The projects include Alta discovery in the Barents Sea, which the company previously said was not economic as a stand-alone development. (Reporting by Nerijus Adomaitis, editing by Gwladys Fouche)
Source: Read Full Article