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Caspian Sunrise Hurt As Has To Sell Oil In Kazakhstan At USD6 A Barrel

Fri, 05th Feb 2021 09:26

(Alliance News) - Caspian Sunrise PLC on Friday posted an output rise for 2020, though the oil and gas company noted it is still selling crude oil in Kazakhstan "at a 12-month low".

It means the company is actually making losses when selling in Kazakhstan, its domestic market.

Shares in the company were 15% lower at 1.68 pence each in London on Friday morning. The stock hit an intraday low of 1.52p.

Caspian said domestic sales have recently ranged between 40% and 45% of total oil produced.

"Despite the Brent oil price rising to approximately USD59 per barrel, more than 3 times the lowest price recorded in the past 12 months, the price at which we are required to sell our domestic production remains at a 12-month low of approximately USD6 per barrel," Caspian said.

A barrel of the North Sea crude oil benchmark fetched USD59.50 on Friday morning in London.

"Until the domestic price recovers selling to the domestic market will remain loss making. We therefore continue to rely entirely on export sales for day to day cashflow and profitability. In partial mitigation we are therefore pleased to report an increase both the overall production we are allowed to sell in February 2021 and an increase in the proportion of that may be sold by reference to export rather than domestic prices."

In 2020, Caspian's output rose 7.7% to 545,667 barrels from 506,620 barrels in 2019.

The company noted that its MJF structure is currently producing at rates between 1,200 and 1,520 barrels of oil per day.

The company is also continuing to appeal against USD32 million of historic costs levied at the structure.

"We look forward to the case being considered by the Kazakh authorities later this month. In the meantime we prepare to pay the next quarterly payment," Caspian said.

By Eric Cunha; ericcunha@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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