Oil Search continues engagement with buyers


OIL Search Ltd is continuing its engagement with potential buyers for offtake from its share of LNG from the proposed Papua LNG Project.
Managing-director Peter Botten said this on yesterdays’ release of the company’s’ Dec 31 fourth quarter and the 2018 full year report.
“During the quarter, ExxonMobil, on behalf of the PNG LNG Project participants, continued discussions with several short-listed parties regarding the final mid-term tranche of 0.45 million tonnes per annum (MTPA) that is being marketed from the PNG LNG Project,” he said.
“These negotiations are expected to be completed in the first quarter of 2019 and will increase the total sales under contract from PNG LNG to 7.9 MTPA.
“PNG is well placed, both geographically and in terms of timing, to capture offtake agreements for supply into Asia commencing in 2024, when significant additional supply is required to meet both new demand growth as well as contestable demand from expiring contracts.
“Many buyers are seeking geographic and seller diversification, which are strong drivers in support of new LNG sellers such as Oil Search.”
Botten said during the quarter, preparations took place for a multi-year, active in-field work-over and drilling campaign in the company’s operated oil fields, aimed at maximising near-term oil output.
This included identifying the most value accretive opportunities, prioritising activities and undertaking technical and commercial studies.
“The programme has commenced with a workover of the IDT 21 well at Kutubu, which will be followed by workovers of M 4 and M 9 at Moran,” Botten said.
“The Moran X appraisal/development well, which is targeting oil toward the south-east of the field, is expected to commence drilling in June, with a Usano development well, UDT S, scheduled to start drilling late in the fourth quarter of 2019.
“All these activities are relatively low cost but, together with the other opportunities identified, have the potential to add some 30 million barrels net to Oil Search, as well as slow the production decline rate from our mature oil fields.”