Maersk Oil CEO: “We Have to Get More Out of Our Existing Assets”

maersk oil
Image: Maersk Oil

Maersk Oil, the oil and gas-producing arm of Danish industrial conglomerate A.P. Moller-Maersk A/S (MAERSK-B.KO), is well on track to surpass its daily output target of 400,000 barrels of oil equivalent a day in coming years, its chief executive said Thursday.

Existing projects under way will bring it up to the targeted figure from the current daily output of around 265,000 barrels of oil equivalent, said Chief Executive Jakob Thomasen in an interview published Thursday in the company’s corporate magazine, The Source. Additional output will be added through production optimization and ongoing exploration efforts, he said.

“It’s pretty straight forward. We have to get more out of our existing assets, we have to turn our many discoveries into production, and we need to continue finding new oil through exploration and acquisitions,” Mr. Thomasen said.

Maersk Oil’s output has declined by more than a third in later years, from 425,000 barrels of oil equivalent a day in 2009, mainly due to its North Sea-based oil fields maturing and maintenance work.

At first glance, the target may seem ambitious, Mr. Thomasen said, but Maersk Oil is prepared to invest between $15 billion and $25 billion in the five years to reach it.

“I am confident about our strategy and the roadmap to achieving our goal. There are still many uncertainties, for example rig availabilities which can delay projects, but we will for sure have an entitlement production of 400,000 boe/d in coming years,” he said.

“We have a strong pipeline of about a dozen significant projects that will take us to a production floor of 400,000 boe/d. On top of this, our exploration efforts continue to add new exciting prospects to the asset portfolio and we are continuously improving our production efficiency maximizing the recovery factor from our production assets,” Mr. Thomasen said.

Alone from two new major fields Maersk is involved in, the Chissonga field in Angola and the Norwegian Johan Sverdrup field, the company expects to add 100,000 barrels of oil equivalent a day to its current production. Another significant boost to the daily output will come from optimization of production at its already operating fields.

Maersk Oil’s head of production operations, Cameron Crawford, told the magazine he estimates that the company currently misses out on as much as 40,000 barrels of oil equivalent a day due to maintenance work and shut in wells, which could be tapped through more efficient operation of the assets and in some cases the drilling of infill wells.

– Flemming Emil Hansen, (c) 2012 Dow Jones & Company