COPENHAGEN - Danish industrial conglomerate A.P. Moller-Maersk A/S said Tuesday it will invest heavily in its oil and gas business in coming years, with the aim of reaching its production target of over 400,000 barrels of oil equivalent a day (boepd) by 2020.
Maersk's oil business, Maersk Oil, has seen its output decline markedly in the past decade, due mainly to the maturation of its Danish North Sea oilfields. Output currently stands at about 265,000 boepd, but targeted investments in new licenses and exploration efforts have put it on the path to recover the lost production within an eight-year period, the company said.
"This target will be achieved by efficient utilization of existing assets and by developing a number of identified projects," the company said in a statement ahead of its capital markets day Tuesday.
"In order to reach the production target and ensure a stable expansion of resources, Maersk Oil expects a period of large investments as well as exploration costs on the level of $1 billion a year," the company said.
The company said Maersk Oil's proved reserves at the end of 2011 amounted to 443 million barrels of oil equivalent. The proved and probable reserves and contingent resources were by the end of 2011 1.384 billion barrels of oil equivalent.
During the coming production expansion period, Maersk Oil anticipates that its return on invested capital will decline, but remain double-digit, it said.
Copyright (c) 2012 Dow Jones & Company, Inc.
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