OSL: Over US$361m sunk in gas project

THE third-quarter report of Oil Search Ltd (OSL) revealed the company has already spent more than US$361 million in the PNG gas project.
The report showed that ongoing equipment mobilisation, construction of infrastructure and camp facilities, site preparation and more have already begun, with major construction jobs ready to start next year.
OSL managing director Peter Botten said considerable time was also spent in helping PNG companies to enable them to participate in business opportunities with principal project contractors.
He said some 700 local businesses had  registered on the supplier database and an enterprise centre, where locals could receive advice on a range of business matters, including corporate structuring.
“Training of PNG nationals in construction skills and operation and maintenance has seen almost 3,000 people employed by the project, of which almost 90% are nationals,” Botten said.
The report said that compared to the second quarter, there had been a 5% decrease in oil and gas production due to various situations.
However, the performance from the key PNG oil fields this year to date, “has been pleasing, with total oil and gas production for the first three quarters only 2% lower than the corresponding period of 2009”.
Botten said OSL and its joint venture partners continued to review the potential for LNG expansion during the quarter.
He said resources for expansion might come from either existing project fields, from discoveries where there was  a high commonality of ownership interest with PNG LNG or from exploration opportunities.
The joint venture is considering accelerating drilling to test potential areas, especially in Hides, which are currently scheduled to be appraised as part of the project development drilling programme, due to begin in 2012.