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Oil Search buys interest in PNG permits

By  Monday, 29 May 2017 21:53
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Oil Search has entered into an agreement with ExxonMobil to farm-in to acreage in the onshore Papuan Gulf basin in Papua New Guinea (PNG) which has the potential to support the expansion of its liquefied natural gas (LNG) portfolio in PNG.

The company will acquire 30% interest in each of the petroleum prospecting licenses (PPL) 474, 475, 476, 477, and 39 from ExxonMobil.

ExxonMobil acquired interests in these licenses when it completed its purchase of InterOil Corp. in early 2017.

The licenses are located in the Eastern Foldbelt, adjacent to the Elk-Antelope field in PRL 15, containing the Triceratops, Bobcat and Raptor discoveries.

As part of the proposed farm-in arrangement, Oil Search will undertake a seismic acquisition program over the permits this year and early 2018.

Due to the increase in activities the company said it will revise its exploration and appraisal budget from US$250-300 million to $270-320 million.

“Prior to our proposed bid for InterOil in 2016, Oil Search identified the onshore Papuan Gulf basin as an area with not only discovered gas resources but also significant further gas potential,” said Peter Botten, managing director, Oil Search.

“The onshore Gulf licenses are in close proximity to the Elk-Antelope fields in PRL 15, which are expected to underpin the Papua LNG development, providing a potential route for future commercialization,” he added.

In PNG, Oil Search has stakes in two LNG developments. Operated by ExxonMobil, the firm has 29% interest in the US$19 billion PNG LNG project which commenced operations in 2014 and is a major supplier of LNG to customers in Asia.

In 2016, PNG LNG produced 7.9 MT of LNG an increase of 14% from the original design specification of 6.9 MT.

Oil Search also holds 23% interest in PRL 15, operated by Total. The permit is home to the Elk-Antelope gas field, an anchor field for Total's proposed Papua LNG development.

Scheduled begin construction in 2018, Papua LNG includes exploring Elk-Antelope; an LNG plant located adjacent to the PNG LNG site; a central processing facility; and approximately 75km onshore and 265km offshore pipelines. 

Image: Oil Search employee / Oil Search

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