OSL investment hits K24b

Business, Normal

The National, Monday October 21st, 2013

 OIL Search has invested K24.5 billion since 2003 in developing and maintaining Papua New Guinea’s oil and gas industry, managing director Peter Botten said.

It spent K21.6 billion in the local oil and gas industry and a further K2.9 billion on developing and maintaining its oil fields in past 10 years.

Botten said: “In 2013, Oil Search will spend close to US$200 million (K550 million) on exploration in PNG alone, the highest amount since its inception in 1929.”

Speaking during the company’s 10th anniversary in Port Moresby recently, Botten said Oil Search continued to drill and invest in PNG despite the global financial crisis.

The company took over operations of the PNG oil fields from Chevron Niugini on Oct 17, 2003. 

Since then Oil Search has grown to become the country’s largest oil and gas producer. 

It now has current market capitalisation of about K29 billion.

The PNG Government is Oil Search’s largest shareholder. 

Botten said: “The value of its shareholding has grown from around K450 million when it took its initial stake in 2002 to around K3.8 billion now, a return of more than seven times on its investment. 

 “This level of confidence and commitment has seen oil field life extended by more than 30 years and production rates, presently more than 29,000 barrels of oil per day, double that anticipated by Chevron”. 

He added: “The success of Oil Search’s drilling and production programme in one of the world’s most challenging environments has added significantly to the wealth of this country, the revenues of the community and the company’s stellar growth over the years. 

Oil Search’s biggest growth asset is its 29% interest in the PNG LNG project operated by Esso Highlands Ltd. 

Botten said: “First liquefied natural gas sales will transform Oil Search into a significant LNG exporting company, quadrupling its production base in the first full year of operation. 

“This, combined with continued production from the PNG fields and exploration upside, gives Oil Search many reasons to celebrate with the people of PNG”.