Energy firm Santos has put the controversial Narrabri coal seam gas project in NSW back on its list of major assets as the company looks to boost production as part of its turnaround plan.
The controversial project will be added to Santos's current portfolio of five major assets, chief executive Kevin Gallagher said in an investor presentation on Thursday.
Earlier in 2017, Santos lodged with the state government an environmental impact statement for the Narrabri project in northwest NSW.
The explorer has for years faced opposition from local communities and anti-CSG activist groups wishing to stop the project from going ahead, citing risks to groundwater and farmland..
On Thursday, though, Mr Gallagher signalled renewed focus on the project, saying he hopes to secure environmental approvals by late 2018.
Local farmers will continue their opposition to the Narrabri project, Sally Hunter from the People from the Plains group said following Santos's announcement.
An anti-CSG protest is being organised at the Pilliga state forest, near the Narrabri site, this weekend by the North West Alliance, a broad alliance of protest groups from across the region.
Narrabri had been sidelined since Santos said in late 2016 that it would streamline its business to just five long-life natural gas assets - the Gladstone LNG terminal, stakes in Papua New Guinea projects, the Cooper Basin and Western Australian gas divisions and its prospective Northern Australian holdings.
The company on Thursday forecast production will be largely stable in 2018 but said it expects sales to be lower during the year than its 2017 volumes.
Santos is looking to divest non-core assets as it tries to cut debt, with a target for net debt of $US2 billion by the end of 2019, from $US2.8 billion now.
The strategy had positioned Santos to provide stable production for the next decade, Mr Gallagher said.
"We have removed substantial cost, arrested the production decline in the Cooper, GLNG is ramping-up and PNG LNG is operating at record rates," he said.
Santos expects to produce between 55 and 60 million barrels of oil equivalent (mmboe) in 2018, similar to the 2017 guidance of 58 to 60 million barrels.
All the five major assets are set to deliver higher output in 2018, after allowing for major planned plant shutdowns at PNG LNG, Darwin LNG and Moomba, Santos said.
Higher production from core assets will, however, be offset by natural field decline in the non-core assets.
Santos said sales volume in 2018 is likely to be lower, at 72 to 78 mmboe, mainly due to lower third-party sales and natural field decline from non-core assets.
Shipments in 2017 are forecast to be between 79 and 82 mmboe by comparison.
The lower sales forecast appeared to have upset investors, with Santos shares falling 13 cents, or 2.7 per cent to $4.65 on Thursday.
Share
