Oil Search farmed into four exploration permits

Sydney-based Papua New Guinea company Oil Search Ltd. farmed into four new exploration permits offshore and onshore Papua New Guinea as part of its LNG expansion plans.

Nov 18th, 2010

Rick Wilkinson
OGJ Correspondent

MELBOURNE, Nov. 18 -- Sydney-based Papua New Guinea company Oil Search Ltd. farmed into four new exploration permits offshore and onshore Papua New Guinea as part of its LNG expansion plans.

The company acquired a 30% interest in PPL276 (offshore) as well as PPLs 338, 339, and 312 (all onshore) to complement its existing license position in the country. All four have gas potential.

PPL276 lies west of the existing but undeveloped Pandora and Pasca gas fields in the Gulf of Papua and is currently wholly owned by Rockwell Energy.

Oil Search will secure its 30% interest in exchange for funding an extension of the current 3D seismic study over promising high-grade prospects. It also has an option to increase this equity to 80% if it carries Rockwell through the drilling of an exploration well in the permit.

Oil Search will earn its 30% in PPLs 338 and 339 from Dabajodi International Energy through the funding of a 2D seismic survey scheduled to begin early in 2011. Once again the company can increase its interest to 70% in each permit by a partial funding of an exploration well.

PPL 312 lies immediately east of the undeveloped Uramu gas field. Oil Search will earn its 30% with the funding of an extension to a 3D seismic study and increase to 75% interest with the funding of an exploration well.

Oil Search expects the seismic work to identify a number of new drilling prospects that would be drilled late next year or early 2012.

The company hopes these gas-prone areas will help build its gas reserves to underpin its LNG expansion plan. Oil Search holds a 34.1% stake in the ExxonMobil-operated two-train PNG LNG project and has been looking at the potential for adding a third train.

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