OIL SEARCH TO PUSH AUSTRALIA-PNG PIPELINE

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PORT MORESBY, Papua New Guinea (PNG Post-Courier, Mar. 1) - Oil Search is set to make progress in the long delayed Papua New Guinea-Australia gas pipeline project with plans for the front-end engineering and design (FEED) stage.

Oil Search Ltd., a 54 per cent shareholder in the project, said it would be more aggressive this year to move the project forward.

Oil Search, which has been operating in PNG since 1929, is 18 percent owned by the PNG government and is one of the largest companies in the country. It owns about 70 percent of PNG’s oil reserves and more than 50 percent of gas reserves in the country.

Progressing to the FEED stage will cost US$60 million to US$70 million (K200 million to K233 million).

Petroleum and Energy Minister Moi Avei said the government welcomed the announcement to advance the multi-billion kina Highlands Gas Project (HGP) .

He said it would be another major project for Papua New Guinea, apart from the Ramu nickel and cobalt project in Madang.

He said in Mendi on Friday that he would meet with ExxonMobil soon for the company to advise him if they would join in and move the project to the FEED stage.

The minister was in Mendi on Friday at the invitation of Southern Highlands Governor Hami Yawari to witness the launch of the governor’s free education policy.

"I would like to hear ExxonMobil say that they would want the gas project to go ahead," Sir Moi said.

Sir Moi is said to have written to ExxonMobil to advice them of the Government’s added incentives to help it as operator to progress the project.

Industry sources said the Government incentives, which would include tax incentives, would put ExxonMobil in a better position to join and progress the project as they had seen the project as one that would not generate much return for them.

Oil Search Limited said they had finalised an integrated oil and gas development model that would maximize value for both products and infrastructure with the natural extension of the original Hides cycling work.

"We have a very active program to review markets, optimise development plans, integrate oil and improve economics and reduce risks," said managing director Peter Botten. 

"We will provide a catalyst for a changed approach."

He said based on rigorous risk reward analysis, Oil Search had decided to commit to FEED activities as soon as practical and discussions were underway with all stakeholders. 

Esso Highlands Limited, as subsidiary of ExxonMobil Corporation, operates the HGP. Other partners include Oil Search Limited, Mineral Resource Development Company (a PNG company representing landowners) and Nippon Exploration Limited of Japan.

March 1, 2004

Papua New Guinea Post-Courier: www.postcourier.com.pg/

 

 

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