British oil firm Soco International has delayed a ramp up in production at its key oil field off the Vietnam coast but said it was confident of achieving target output during 2012.
Soco, which in August said it could reach its target of producing 55,000 barrels of oil per day (bopd) from the first phase of its Te Giac Te oil field by the end of 2011, said it wanted to understand the field better before raising output to that level.
“We can get to 55,000 bopd. It’s a very simple process but it really is a factor of the information gain,” Chief Executive Ed Story said in an interview with Reuters on Tuesday.
Production from the field, which Soco co-owns with Vietnam’s state oil group PetroVietnam and Thailand’s state-run PTT Exploration and Production, is currently at 35,000 bopd, the company said.
“We are certainly capable of having a substantial increase by the second quarter,” Story added, declining to give a specific date during 2012 when the 55,000 level would be reached.
“The field could easily be, assuming the floating production storage and offloading vessel can handle it, could be in the 60,000 bopd plus range,” said Story when asked where he sees production at the end of 2012.
Shares in Soco traded down 8.8 percent to 301.2 pence at 1027 GMT, topping Britain’s mid-cap fallers board.
Royal Bank of Scotland analyst Phil Corbett called Soco’s update “a touch disappointing”, while Numis Securities analyst Sanjeev Bahl said he believed uncertainty remains over 2012 full-year production from the Te Giac Te field.
Production from Te Giac Te started in August and with output at 35,000 bopd, the company has started to generate substantial revenues.
Story said the company would look to spend its cashflow on new exploration projects.
“New licences in areas where we’re familiar and potential other ventures with third parties,” he said, adding that the company was in discussions about a joint venture in Africa.
Recent drilling off the coast of Congo has not been successful, however, Soco said, as the Mindou Marine 1 well did not find oil or gas in a reservoir. It plans to drill two other wells in the area at a cost of around $25 million per well.