PNG OIL COMPANY SEEKS NEW WELLS

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PORT MORESBY, Papua New Guinea (PNG Post-Courier, Jan. 4) - Papua New Guinea’s oil production is on the decline and new production wells have to be found to avoid unplanned shutdowns.

Oil Search Limited managing director Peter Botten told the Sydney Mining and Petroleum Conference last month that current projections suggested "unless there was change, the Gobe Main Field would need to be shut-in within the next few years. Field closure forces further acceleration of unit operating costs," Botten said. "We need to break the cycle but it needs to be done quickly before we lose the opportunity."

He said since Oil Search took over operations of PNG oil and gas assets from ChevronTexaco in 2003, they have sought new sources of crude oil.

The company’s exploration program has been going on actively as they firm up new drilling targets.These targets, all located in the Southern Highlands, include the Northwest Moran which was discovered in 2003 and is due online in the first quarter of this year at 3,000 barrels of oil a day.

Oil Search recently started drilling its Kapul-1 property and they are scheduled to reach total depth of drilling by the end of this month.

Another major petroleum exploration license holder, InterOil Corporation of Canada suspended its drilling operations in the third quarter of last year pending identification of and acquisition of additional drilling equipment.

January 5, 2005

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

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