Denmark's Maersk Oil has announced solid Q1 results for 2017 that saw profits boosted by costs reductions and lower exploration costs.
Maersk Oil posted a profit of US$328 million that was helped by an average oil price in the quarter of $54 a barrel compared to $34 last year and a one-off tax of income also contributed.
"Maersk Oil is demonstrating its ability to deliver results in a difficult market. Our continued solid operational performance highlights our ability to operate assets predictably, putting us in a good position for the future," said Maersk Oil CEO Gretchen Watkins.
The Danish oil firm said in a statement that the UK and Kazakhstan delivered high production efficiency, further supported by production from Algeria. The firm achieved first oil from the Flyndre field in the UK and Norway, showing initial potential of up to 10,000 barrels of oil equivalent per day (boepd).
Ongoing cost reduction from organisational efficiencies and effort to focus the portfolio with the divestment of the Boa field in the UK continued, alongside lower exploration costs. The focus going forward will be on ts major North Sea sanctioned capital projects – Culzean in the UK North Sea and Johan Sverdrup in Norway.
“These two milestones strengthen our position in the North Sea and reaffirm our commitment to invest in the region. The North Sea is the heartland of our activities,” said Watkins.
Maersk Oil’s entitlement production was 275,000 boepd, compared to 350,000 boepd in Q1 2016. Lower production was primarily due to production decline in Qatar, where higher oil price and lower operating costs led to fewer entitlement barrels for cost recovery. With the firm leaving Qatar in July, production is expected to be lower in the second half of the year.