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October 20 (Reuters) – Australian electricity retailer and gas producer Origin Energy ORG.AX said on Wednesday that high commodity prices are expected to offset lower profits from its activity in energy markets.
Oil and natural gas prices have skyrocketed globally as activity recovers from lulls from the pandemic, causing disruption in energy-intensive sectors and soaring energy prices for consumers.
Origin’s comments at an annual general meeting came months after reporting a sharp drop in FY2022 profits for its energy markets business, which is suffering from a collapse in wholesale prices. electricity.
He said, however, that with oil prices over $ 80 a barrel, much higher than the figure on which he based his forecast in August, he expected to reap the benefits of higher prices. WHERE
Origin said FY2022 breakeven costs were expected to be between $ 20 and $ 25 per barrel, while it projected cash flow of over A $ 1 billion after hedging with Australian Pacific LNG (APLNG).
“With the price of oil significantly higher than the US $ 68 / bbl on which we based our forecast, today we reiterate the rise of a higher oil price,” Managing Director Frank Calabria said in a statement. speech.
The company left its baseline profit forecast for energy markets for fiscal 2022 unchanged between A $ 450 million and A $ 600 million.
The Sydney-based company said a decline in profits from its energy markets division should be more than offset by a strong performance from its APLNG business.
APLNG is one of the largest natural gas producers in Eastern Australia and is a joint venture between Origin, ConocoPhillips COP.N and Sinopec 600028.SS.
(Reporting by Harish Sridharan in Bengaluru, additional reporting by Nikhil Kurian Nainan; Editing by Subhranshu Sahu)
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