MORE PAPUA NEW GUINEA WELLS, TAX BREAKS ON TAP

The group operating the Kutubu oil development/export project in Papua New Guinea plans a $25 million (Australian), five well exploration program in the country beginning this month. All of the wells are within a 30 km radius of Kutubu production facilities and target new reservoirs. The program will focus on nearby structures that are believed capable of holding 70-240 million bbl of oil. The first well, Makas IX, lies northwest of Kutubu on the PPL 161 permit operated by a unit of Chevron

June 12, 1995

2 min read

The group operating the Kutubu oil development/export project in Papua New Guinea plans a $25 million (Australian), five well exploration program in the country beginning this month.

All of the wells are within a 30 km radius of Kutubu production facilities and target new reservoirs. The program will focus on nearby structures that are believed capable of holding 70-240 million bbl of oil.

The first well, Makas IX, lies northwest of Kutubu on the PPL 161 permit operated by a unit of Chevron Corp. (OGJ, Feb. 13, p. 25). It will be spudded this month.

Other targets will be chosen from 10 mature prospects in the area. The five planned wells will be drilled back to back, extending the program into early 1996.

Meantime, concurrent development work in Kutubu fields is expected to hold production from the project at 110,000 b/d this year and boost it to 115,000 b/d in 1996 before decline begins in 1997. Production peaked at 127,000 b/d in April 1994.

Next year, Gobe and Southeast Gobe oil fields are expected to go on stream at 50,000 b/d to keep oil flowing through the pipeline that extends to the group's export terminal in the Gulf of Papua.

In another Papua New Guinea development, Mining and Petroleum Minister John Giheno said producing oil companies in the country will be taxed according to market prices for crude and not on the so-called "norm" price. The norm price is the estimated value of crude as it is exported.

The change follows presentations to the Papua New Guinea government by Kutubu exporters that claimed they were overtaxed because the norm prices were too high and did not correspond to prices they received.