Talisman reviews project due to drop in oil prices

 TALISMAN and its partners in the Stanley Gas project in Western are revisiting development scope of the project to improve its value, vice president Grant Christie says.

Christie said the recent decline in global oil prices has had an adverse impact on the project’s economics.

He added that this has caused Talisman and partners, including Horizon Oil, Osaka Gas Niugini Pty Ltd and Diamond Gas Niugini B.V, to delay the start of project construction pending a review of the project’s design and alternative development options. 

Last Friday, Christie met with Petroleum and Energy Minister Nixon Duban in Port Moresby to discuss status and development plan for the project, up-skilling of local workforce and community investment projects  as well as current challenges facing the industry due to lower oil prices.

Duban said their discussions highlighted the importance of the review – a profitable Stanley project would benefit all stakeholders. 

The project design reviews are expected to be completed this year. 

The project agreement included a domestic market obligation clause whereby 15 per cent of the gas was reserved for domestic consumption.

“The objective is to target local buyers where possible. This includes gas sales to nearby mines and condensate sales to local customers. We are looking into the feasibility of producing refined products from Stanley to meet local demands,” Christie said. 

“We will take the opportunity created by the delay in construction to work closely with local landowners to agree the umbrella company structure and to assist with development of landowner companies’ skills in order to optimise their participation during the construction phase and once production has commenced.” 

Duban said: “Talisman will bring their expertise to bear to ensure this project works in the best interests of PNG, in particular Western people and the Stanley joint venture.”