Oil Search Ltd., Sydney and Port Moresby, has exceeded its oil and natural gas production targets for 2016, recording the company’s highest levels in 80 years.
Oil Search Chairman Rick Lee told the company’s annual general meeting on May 19 that the firm delivered 30.2 million boe last year—a 4½-fold increase in the 3 years since the Papua New Guinea-LNG project came on stream in 2013.
Lee said Oil Search supplied 13% of the PNG-LNG project’s gas and handled all of the project’s condensate in 2016. When combined with production from the company’s oil fields in the surrounding Papua New Guinea Highlands, total liquids production exceeds 65,000 b/d in 2016.
Even with downward pressure on oil and gas prices, Oil Search still posted a profit of $107 million, the company said.
Lee remained optimistic about the future, saying that with cooperative development of resources like P’nyang, Elk-Antelope, and the latest Muruk discovery, Oil Search expects to deliver top-quartile perfomances for the next 5-7 years.
Elk-Antelope has an estimated 2C gas resources of 6.6 tcf, P’nyang 3.5 tcf, and Muruk possibly another 1-3 tcf. These fields could supply two more LNG trains to the existing two in the PNG-LNG project.
In addition there are three more prospects near Muruk and the Hides gas plant named Clucher, NaDia, and Karoma that have potential to hold 4-6 tcf of gas and may be drilled before yearend 2018 if seismic data supports a renewed effort.
Two new trains could mean a doubling of Papua New Guinea’s LNG exports to 16 million tonnes/day and there would be capital expenditure savings of $2-3 billion in a cooperative development that shared utilities, control systems, storage facilities, and the load-out jetty.
Separately, Oil Search also is considering small-scale LNG projects in Papua New Guinea, looking at projects that supply as little as 500 tpy and as much as 1.5 million tpy for domestic customers in Papua New Guinea.
The company has plans to appraise earlier gas discoveries at Barikewa and Kimu later this year as well as Uramu field in 2018 in an effort to confirm a viable resource base for the small-scale LNG projects.
