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Business |
Oil Search aims to make new find
By BAEAU TAI
MAJOR oil company, Oil Search Limited, will continue its
aggressive programme of gas exploration and appraisal, aimed at
establishing further contractable gas from its PNG portfolio.
The company said in its 2006 annual report that it was committed
to being a leader in the creation of a significant gas industry in
PNG.
“The development of PNG’s substantial gas resources promises to be
a major long-term driver for both Oil Search and the country,”
chairman Brian Horwood said in the report.
He said interest in PNG’s gas resources as a potential LNG source
gained significant momentum last year in the wake of rapidly
escalating LNG prices and increasing demand, particularly in the
Asian region.
“In 2006, Oil Search received approaches from a variety of
interested LNG developers, attracted by PNG’s major gas resource
base, a competitive fiscal regime and the substantial existing
infrastructure,” he said.
“An LNG development in PNG would also provide a major boost to the
PNG economy, with significant in-country value-added and
employment opportunities.”
Oil Search expects market interest and the resource base within
the company’s current portfolio will allow at least one or more
LNG trains to proceed, and it is currently working in parallel on
two potential LNG projects
Early this year, ExxonMobil completed initial studies that
demonstrated an LNG development, based on the Hides/Angore fields
as the core gas resource, is commercially attractive.
Discussions have been initiated with the Kutubu and Juha joint
ventures to join and progress an LNG project.
The company delivered a strong financial performance last year,
its fifth consecutive year of profit growth. Core profit after tax
but before significant items was US$207.5 million, 4% higher than
in 2005.
This was achieved despite the sale of a large parcel of producing
oil assets in PNG to AGL at the beginning of last year, which
reduced the company’s share of production from certain fields.
Net profit, including the profit made on the asset sale to AGL and
impairment charges, was US$412.0 million, up 106% on 2005 profit
levels.
Operating cash flow also rose, from US$357.7 million in 2005 to
US$399.0 million last year, which together with the cash received
from AGL, significantly strengthened the company’s balance sheet.
At the end of last year, Oil Search had US$477.9 million of cash,
and no debt, placing it in an extremely healthy financial
position.
 
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