Oil Search, ExxonMobil farm into CNOOC exploration permits

Oil Search Ltd., of Sydney and Port Moresby, has refocused its attention offshore in the Gulf of Papua in a bid to explore areas with potential to support the company’s expanding LNG portfolio. Its Papua New Guinea LNG (PNG LNG) joint-venture partner, ExxonMobil Corp., also has joined the project.

Oil Search has entered agreements with CNOOC Ltd. subsidiary Gini Energy Ltd. to acquire a 40% interest in each of two deepwater exploration permits 150 km south of Papua New Guinea’s capital of Port Moresby. Gini previously had 100% interest in each.

The two contiguous permits, PPL 374 and PPL 375, have a combined area of just less than 25,000 sq km. Water depths range between 1,000 m and 2,500 m.

ExxonMobil also will acquire 40% interest in the two permits, leaving Gini in possession of a 20% share.

Oil Search Managing Director Peter Botten noted that the company undertook a comprehensive study of exploration opportunities in Papua New Guinea during 2015-16. This work identified the Papuan Gulf as an area of high gas potential. Several leads and prospects with the possibility of holding multitrillions of cubic feet of gas have already been identified in the two permits.

Botten acknowledged ExxonMobil’s expertise in deepwater exploration and production as a major plus for the coming exploration venture. It is also the first time that Oil Search has worked with CNOOC.

It is not the first time that Oil Search has ventured into the gulf, although the earlier forays were in relatively shallow water. The last program took place several years ago in partnership with Total SA and resulted in the uncommercial Flinders and Hagana gas discoveries about 150 km east of Daru and the Fly River Delta.

The relatively close proximity of the new farm-in permits to the existing PNG LNG Project and proposed Papua LNG Project production plants at Caution Bay 20 km northwest of Port Moresby will be a bonus for development if the exploration program is a successful.