Oil Search on track to begin production in 2014
The National – Wednesday, July 27th 2011
By PATRICK TALU
AUSTRALIA-listed oil and gas company Oil Search Ltd is making progress in its liquefied natural gas project and is on track to begin production in 2014, it said yesterday.
The company said Esso Highlands, the ExxonMobil subsidiary which operates the US$15 billion project, built the foundation for the LNG plant and has begun on-shore pipeline work.
It also said it had also made progress in exploring for gas supplies in a potential expansion of the project.
“During the quarter, significant progress was made on bedding down an integrated gas exploration and appraisal drilling programme in the Highlands, with a view to maturing gas for a potential PNG LNG expansion,” it said in a report.
The 6.6 million tonne per annum project is a joint venture between ExxonMobil, OSL, Santos, Japan’s Nippon OIL and the national government.
PNG LNG has long-term supply agreements with China’s Sinopec, Japan’s TEPCO and Osaka Gas, and Taiwan’s CPC.
Its report for the second quarter ending June 30 released yesterday said a total oil and gas production for the quarter was 1.77 million barrels of oil equivalent (mmboe) similar to 1.79 mmboe for the first quarter.
OSL said the total sale for the quarter was 1.60 million of barrels (mmbbl), a significant increase of oil sale from the first quarter of 1.23 mmbbl, due to the timing of shipment.
The company said the average realised oil price during the quarter was US$123.28 per barrel, 13.5% higher than the oil price of US$108.58 per barrel realised in the first quarter of 2011.
OSL said as a result of higher oil sales and realised oil prices, total operating revenue for the quarter increased 42% from the first quarter levels to US$217.8 million.
It said that at the end of June, the company held US$1.22 billion in cash excluding joint venture balance while a US$13.2 million was spent on exploration and evaluation activities and US$348.4 million on the PNG LNG Project and an additional US$35.32 million on field development work.