Industry crossroads

HORIZON Oil has spudded the long-awaited Tingu-1 exploration well in Papua New Guinea’s Western Province, while Nautilus Minerals’ even longer anticipated arbitration proceedings against the PNG government have entered the hearings phase this week.
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The Tingu-1 well was spudded not long after midnight this morning in PRL21, which also hosts the Elevala and Ketu fields.

Horizon said the well, located about 9.2km northwest of the successful Elevala-2 appraisal well, would take about 45 days to reach its total planned depth of 3213m.

There are hopes that the Tingu prospect could match the Elevala field with a best case contingent resource of around 400 billion cubic feet of gas and 22 million barrels of condensate.

A discovery at Tingu-1 will help boost the condensate recovery project plans for PRL21, which are in the front-end engineering and design phase.

Osaka Gas previously agreed to acquire an 18% stake of PRL 21 from Horizon although the transaction is still pending various approvals.

Once completed Horizon will have a 27% stake of PRL21, which is also owned by Talisman Energy (32.5%), Kina Petroleum (15%) and Mitsubishi (7.5%).

Meanwhile, deep-sea explorer Nautilus long ago announced that today, August 26, would mark the start of Sydney-based arbitration proceedings between it and the PNG government.

A Brisbane-based Nautilus spokesperson told today that she was unable to speak to management as they were in a meeting.

"Some of them are already in Sydney for the proceedings," she said.

"What I do know for sure is that the arbitration process is scheduled to conclude in 10 days."

The PNG government is a 30% stakeholder of Nautilus' Solwara 1 copper-gold project in the Bismarck Sea, with Nautilus long claiming the government is behind in making payments.

In an update in March, Nautilus chief executive officer Michael Johnson said the government had not contributed to any of the project development costs since the joint venture was finalised in March 2011 - with more than $US80 million owed at the time.

Nautilus had previously tried to settle JV disputes with the PNG government to avoid arbitration.

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