Dana Gas says it started production from the Zora gasfield, offshore from Sharjah, last month, which will help to offset the fall in oil revenue.
“Our exploration and development activities in the UAE and in Egypt will provide a short to medium-term boost to our overall production levels and thereby help to offset the decrease in revenue and profits resulting from the current low oil price environment,” said Patrick Allman-Ward, the chief executive, in a statement yesterday.
The Sharjah-based company, which operates in Egypt and Iraq’s semi-autonomous Kurdish region, expects the Zora gas project to contribute gross annual revenue of about US$58 million, Mr Allman-Ward said in November.
Dana Gas’s Kurdish operations have been plagued by delayed payments from the Kurdistan government. Dana Gas made a profit in the fourth quarter as it received delayed payment from an operator in Kurdish Iraq. It made a net profit of $134.2m for the fourth quarter compared with a net loss of $4m in the same period the previous year.
It also produced an average output of 63,900 barrels of oil equivalent a day last year.
Gas from the Zora field, which will be used for power generation, is being piped to an onshore gas processing facility constructed by the company in Sharjah’s Hamriyah free zone. The company did not disclose the cost of the project.
The project, which will have flow rate of 40 million cubic feet a day, had been delayed.
“Initial project start-up was achieved on January 14 2016 with early gas supplies being intermittent as the gas plant was being fully commissioned,” a company statement said. “Subsequently sales production was delayed due to urgent maintenance work on gas supply infrastructure at the customer’s receiving facilities.”
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