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UPDATE 1-Oil Search cuts 2021 investment spending as PNG virus curbs weigh

(Adds details on oil prices, expenditure)

April 23 (Reuters) - Australia’s Oil Search on Friday slashed its planned full-year investment expenditure by 22%, citing cost-savings measures and coronavirus-induced restrictions in Papua New Guinea (PNG), where a majority of the explorer’s projects are located.

The country has imposed strict restrictions on movements as it faces a health crisis, with rising COVID-19 infections weighing on its fragile health system.

Oil Search said investment spending for 2021 would now be between $250 million and $300 million, down from a prior range of $325 million and $445 million.

“Production investment expenditure has been revised down to reflect delays in major work programs, including the Kutubu Refinery rebuild, and deferred well planning activities,” Oil Search said in a statement.

The firm’s operating revenue fell 16% to $301.5 million for three months ended March 31 from a year earlier, hurt by a drop in production at its liquefied natural gas (LNG) project in PNG and a slight decline in average realised price for the fuel. It, however, beat an RBC Capital estimate of $281.1 million.

Oil Search’s average realised oil and condensate prices for the March quarter were up about 16%, while realised LNG prices fell about 22% from a year earlier.

Total production for the quarter fell 6.8% to 6.86 million barrels of oil equivalent (mmboe) from a year earlier, narrowly missing the RBC estimate of 7.1 mmboe. (Reporting by Sameer Manekar in Bengaluru; Editing by Ramakrishnan M.)

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