Oil Search expands PNG portfolio

AS part of its liquefied natural gas expansion plans, Oil Search has farmed into four new exploration licences in Papua New Guinea which have potential for material gas accumulations.
Oil Search expands PNG portfolio Oil Search expands PNG portfolio Oil Search expands PNG portfolio Oil Search expands PNG portfolio Oil Search expands PNG portfolio

The company will acquire a 30% interest in each of PPLs 276, 338, 339 and 312, which complement its existing licence holdings in the PNG Highlands.

Rockwell Energy is operator and holds a 100% interest in PPL 276, which is west of the Pandora and Pasca gas fields.

Oil Search will secure the 30% interest in PPL 276 in exchange for funding an extension of the current 3D seismic study over high-grade areas.

The company also has an option to increase its equity in the permit to 80% in exchange for a well carry.

In the onshore PPL 338 and PPL 339 permits, Oil Search will acquire a 30% interest from Dabajodi International Energy by funding a 2D seismic survey, which will start early next year. The company can also increase its interest in the two licences to 70% in exchange for a partial well carry.

In PPL 312, east of the Uramu gas field, Oil Search will fund an extension of a 3D seismic study to earn a 30% interest. The company can also increase its interest to 75% by free carrying the costs of drilling a well.

Oil Search managing director Peter Botten expects the seismic work will identify and mature a number of new drilling prospects that would be subject to evaluation in late 2011 and 2012.

"Oil Search will potentially look for appropriate partners when the seismic and prospect evaluation is completed to share the evaluation risks and form long-term relationships that can be the basis of a new LNG-focused growth stream for the company," he said.

In September, PetroleumNews.net reported the company had made progress on pursuing new offshore opportunities in line with its strategy of building up gas reserves to underpin its LNG expansion plan.

The company holds a 34.1% stake in the ExxonMobil-operated two-train PNG LNG project and has been looking at the possibility of adding a third train.

"The delivery of PNG LNG trains 1 and 2 and further gas-based developments in PNG is a strategic priority for Oil Search," Botten said.

"The resources for expansion will be sourced from a combination of growth in reserves in existing gas fields and from exploration."


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