Top group to visit oil, gas fields in PNG

Port Moresby (Papua New Guinea Post-Courier/PINA Nius Online) – A delegation of international investors will be visiting major oil and gas project sites in Papua New Guinea in the middle of this month, says Oil Search managing director Peter Botten.

He said Oil Search would host the delegation.

Mr. Botten told the Post-Courier that the delegation would include 10 investors from major institutions and investment houses in the United States, Europe and Australia.

He said the visit is especially timely given the present status of the PNG Gas project, exploration and development activities now taking place in the country, as well as the privatization process being carried out by the government.

It represents an ideal opportunity to show these investors the merits of continued and increased investment in the country, as well as the world class oil and gas operations that are present here, Mr. Botten said.

He said Oil Search would continue to carefully explore areas in PNG, away from the presently known oil and gas fields in order to assess the true potential of the country.

We are one of the biggest investors in the country, with major interests in Kutubu, Moran, Gobe and Hides, as well as having the largest interest in the PNG gas to Queensland project.

A substantial portion of the revenues we receive from production here are reinvested in PNG to enable us to grow the oil and gas business here.

The company told the government last Wednesday that its exploration efforts on the Petroleum Prospecting Licence (PPL) 188 at Anama in Kikori, Gulf province was unsuccessful.

Mr. Botten said Oil Search had been exploring in PPL 188 for four years.

He said the joint venture, which includes Woodside Petroleum, had acquired more than 1000km of seismic data as well as drilling the Anama well, the first offshore well in the Gulf of Papua for nine years. The rig, Ensco 50, was mobilized from Indonesia and took about 11 days to reach the Anama location. Drilling started at the well on October 13.

The well cost less than $US5 million, more than half what a well costs in the Highlands, Kutubu, Moran and others. Traces of oil were found at Anama, but these were not commercially viable.

“An oil discovery, if made, can be developed quickly, with the oil sold on world markets as for Kutubu, but if we find gas, you need to find a market, as we are trying to do for the gas to Queensland project,” Mr. Botten said.

He said that because there had been little drilling in the foreland area of offshore PNG, all new wells were important in providing information on whether oil and gas might be found in the area, and if the right conditions for an economic discovery existed.  Mr. Botten said the dry well at Anama showed that the area probably did not contain oil and gas.

He said the foreland covered a large area and further wells were needed to assess the area from Kikori to Daru and inland west to the PNG border.

Mr. Botten said Oil Search decided on the weekend to drill the second hole at Duadua, 40km south of Anama.

We have decided that as drilling operations were carried out substantially under budget that we will go ahead and drill Duadua straight away. If the drill rig leaves now it would be many years before one comes back, and the potential of a large part of the foreland basin will remain unknown.