Release PPL-337, allow exploration work

Letters, Normal

The National, Monday October 21st, 2013

 IT is time Kina Petroleum (KPL) relinquishes its hold on petroleum prospecting license (PPL) 337, or correctly put, be made to do so.

The Department of Petroleum and Energy (DPE) knows very well what KPL should have done on the Banam Anticline petroleum prospecting precincts. 

KPL obtained PPL-337 in Sep, 2009, and there now remains just under two years for KPL to do anything with it. 

In May, KPL announced that it would physically drill a well in Oct, which was a postponement from April. 

There already exists a history of failure by previous exploration companies for not completing exploration work on the Banam Anticline and its progress has become stagnant in the north New Guinea basin. 

As a local from the area around Banam, I am not pleased about the way the regulator (DPE) and the investors (explorers) have been playing the oil-and-gas industry game on the field now being called the PPL-337 license area. 

There appears to be a lack of seriousness and sincerity about exploration work. 

This trend of systemic laxity compels me to make the following intuitions:

  • there prevails a weakness or underperformance within the DPE in executing its regulatory responsibilities on license-holders, let alone penalising them, for non-compliance; 
  • The DPE’s marketing and promotion programme has not been effective or successful in attracting large, seasoned industry players like ExxonMobil or Shell, who have the expertise, experience, finances and machinery to progress exploration work from start to completion; and,
  • only junior explorers with insufficient finances, no technical expertise, no reputation and questionable capabilities have been accorded licenses, which are instead  used to do stock market business, deviating from licensing objectives. 

KPL has significantly diversified its portfolio of exploration licenses and appears to be only interested in the Papuan basin.

It should therefore surrender the PPL-337 to free the license area onto the open market. 

Otherwise, the DPE must take appropriate enforcement actions in the aim to progress exploration work in the license area to completion.

I believe Banam Anticline is the least costly area for exploration work and has advantageous economic viability prospects, given the presence of Madang Port facilities, good road access and its nearness to potential Asian markets. 

It only takes a capable, reputable, sincere explorer to acquire the license and complete the exploration phase.

Nelson Kumosa, Via email