The National, Monday 06th Febuary 2012
PAPUA New Guinea has been dubbed one of the last frontiers of energy exploration with only 8,000km of seismic areas acquired throughout the country in the past 50 years.
A Wall Street Journal report last week stated though this was not a lot, there had so far been some great discoveries from Oil Search Ltd, InterOil and Talisman.
It reported a BP study of PNG showing that the country had 15.6 trillion cubic feet of proven reserves of natural gas at the end of 2010.
“That figure likely underestimates the true resource as PNG has been lightly explored up to now.
“It is hardly a surprise that there is increasing interest in PNG exploration,” it reported.
The Journal reported that since PNG seemed generally rich in prospects and so few have been drilled yet, big licence holders such as ExxonMobil and Oil Search Ltd seem to have good prospects here.
Oil Search, as a large corporation with activities in Iraq, Tunisia and Yemen, had been producing oil and gas from its Highlands fields of Kutubu, Moran, Gobe, Hides and SE Mananda since 1929.
They are presently constructing an LNG facility in which they have a 29% stake in the project, with Exxon (33.2%), PNG government (16.8%), Santos (13.5%), Nippon Oil (4.7%) and PNG landholders (2.8%).
The project had already been sold out, but Oil Search was on the hunt for the gas resources to underpin a possible third train.
On many of their licences, ExxonMobil either has a stake and/or was the operator, and even where it was not, they benefited from finds in that they were the biggest stakeholder in the PNG LNG venture.
Another player, Talisman, though having small holdings in exploration areas, had been in the country since 2001.
Their interest in onshore exploration was much more recent, which led to the purchase of Rift Oil in Augustus 2009 for US$177 million and Talisman accumulating an interest in 12 licences covering an area of more than 15 million acres.
One of Talisman’s licences included a 50% holding, (Eaglewood 40% and Fortune International 10%) on the Ubuntu-1 well, which drilled a condensate rich gas discovery.
InterOil has a large exploration opportunity that deserves attention, apart from its Elk/Antelope gas and condensate field.
It now had plans for reef explorations, where should any play out, would provide something of a bonanza, as a reef was what makes the Antelope wells so productive, and so far, InterOil was the only one discovering reefs on PNG.
The well in Bwata/Triceratops, that was recently spudded, might well give a first shot as when drilled by a former license holder in 1959, contained gas.
PNG also has a number of smaller and micro cap explorers, which sometimes have surprisingly large licence acreages such as Horizon, New Guinea Energy, Kina Petroleum and LNG Energy.