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Oil Search output dips in June quarter

Staff Reporter | 4:10 PM |
Papua New Guinea-focused Oil Search said it is sticking with 2017 production guidance despite output in the second quarter slipping due to planned maintenance at its operations and Exxon Mobil Corp’s PNG LNG gas-export facility.

Production for the quarter declined 4.4 per cent quarter-over-quarter to 7.24 million barrels of oil equivalent in the three months through June, and inched down 0.5 per cent to 14.81 million barrels for the first half of the year.

That left the company (OSH) on track to produce 28.5 million to 30.5 million barrels for the year, the company said.

The company, based in the Papua New Guinea capital of Port Moresby and listed in Australia, said it also continued to expect operating costs would be between $US135 million and $US145 million and overall capital expenditure $US380 million-$US480 million.

Sales revenue for the second quarter was 3 per cent lower at $US332.5 million, as a rise in the average price it realised for liquefied natural gas offset a fall in the oil price, but was 16 per cent higher for the first half at $US676.2 million. There is a lag between crude-oil and prices for LNG, which are often benchmarked against oil.

Oil Search’s main asset is a 29 per cent stake in the PNG LNG gas-export project operated by Exxon that began producing in April 2014. It also owns assets, including a near-23 per cent interest in the prospective Elk and Antelope gas fields in Papua New Guinea being developed by France’s Total SA.

The company said there was strong customer interest in longer-term LNG supply agreements, and Exxon continued to market up to 1.3 million tonnes in fuel from the PNG LNG project. Output from the project averaged 8.65 million tonnes a year in June, the highest rate since start-up, it added.


SOURCE: THE AUSTRALIAN/PACNEWS

Oil Search, ExxonMobil and Total unveil PNG LNG expansion plans

Staff Reporter | 4:09 PM | |
Oil Search and its partners ExxonMobil and French giant Total are pushing to have their new plan for the expansion of LNG production in Papua New Guinea ready for around October, when the new PNG government should be in place.

Oil Search said on Tuesday that Exxon, which operates the PNG LNG project and the P'nyang field, Total, which operates the Elk-Antelop project, examined "various development concepts for the Elk-Antelope and P'nyang gas fields" during the June quarter, where OIl Search's production slipped slightly due to programmed maintenance that shut down its two production facilities for 17 days.

“Oil Search believes the most likely development is based on the construction of two LNG expansion trains at the PNG LNG Project plant site, thereby utilising existing downstream infrastructure, using the existing gas resources in the Elk-Antelope and P'nyang fields,” Oil Search chief executive Peter Botten said.

But with local and national election in full swing in PNG, the joint venture partners will be working towards presenting their "aligned view" to the new government late in the September quarter, or early in the December quarter.

“We believe that LNG expansion will be a key focus for the new government, which will be seeking to see a development move forward in a timely manner.”

Production at PNG LNG fell 3 per cent across the quarter, but ran at an annualised rate of 8.65 million tonnes per annum during June, the highest monthly rate achieved since start-up in 2014.

Oil Search posted a 4 per cent fall in total production for the June quarter to 7.24 million barrels of oil equivalent, while total revenue dropped 3 per cent to $US332.5 million compared with the March quarter.

For the first half of calendar 2017, revenue was 16 per cent ahead the first half of 2016, to $US676.2 million.

The company's average realised LNG and gas price was US$7.93, 7 per cent higher than the first quarter average, while the average realised oil and condensate price decreased by 8 per cent  to $US50.99 a barrel.

The company affirmed guidance for 28.5 mmboe to 30.5 mmboe and said its costs per barrel would be at the lower end of production  guidance for $US8 to $US10.

Royal Bank of Canada analyst Ben Wilson said he is “awaiting the outcome of the PNG election [expected August 2017], after which we expect rapid progress toward a formal structure for expansion trains at PNG LNG to emerge over the second half.

“We retain our Outperform recommendation on Oil Search as one of the few LNG focused plays capable of materially growing group production in a weak LNG and oil market.”.

SOURCE: FINANCIAL REVIEW/PACNEWS

Mining scholarship open to Papua New Guinea women

Staff Reporter | 4:53 PM | |
WOMEN from Papua New Guinea and other Pacific island nations are eligible to enter the Minerals Council of Australia’s scholarship program for the company director’s course if they are currently working on a mine site within Australia.

Last week the MCA said that it was partnering with BHP Billiton and Downer to support talented women "to take the next step in their careers", adding that the course would be completed at the Australian Institute of Company Directors (AICD).

"This initiative aims to increase women's participation on company boards within the minerals industry," the MCA said.

"The AICD course equips graduates with the skills and knowledge needed to succeed in a company director role. Now in its fifth year, the program has funded 15 women to complete the company directors course so far," the MCA said.

Applications are now open for four scholarships.

To be eligible, applicants must be Australian-based and be nominated by an MCA member or associate member company.

Applications close at 5pm on Friday, July 14.

For further information, contact Jillian D'Urso, wbo is the policy research officer for MCA at +613 8614 1851 or ​check out other scholarships on : Scholarships Awards Website 

No plans for deep sea mining in Fiji

Staff Reporter | 4:29 PM | ||
Seabed deep sea mineral mining will not be conducted in waters around Fiji in the near future, says Ministry of Lands and Mineral Resources permanent secretary Malakai Finau.

“The costs involved are absolutely huge,” he said.

“Current exploration interest is in its very early or preliminary stages, we haven't even reached the advanced stages as yet.

“Seabed resource exploration requires a lot of resources. One of the biggest costs is the need to engage a state-of-the-art marine research vessel.

“Getting exploratory work done on land is very expensive, so you can imagine what it's like when you are attempting to do this out at sea.”

Meanwhile, a report by the World Bank released in April last year titled "Precautionary Management of Deep Sea Mining Potential", called on Pacific Island countries to be extra vigilant and cautious over any plans for seabed mining.

The report said any Pacific country supporting or considering deep sea mining activities must proceed with a high degree of caution to avoid irreversible damage to ecosystems.

The World Bank report also emphasised the need for strong governance measures to ensure that appropriate social and environmental safeguards were in place.

Pacific Island countries that have granted permits for deep sea mining exploration include Papua New Guinea, Fiji, Tonga, Vanuatu and Solomon Islands. The Cook Islands has advanced its efforts and done a minerals exploration tender process.

Finau is chairing the Science Technology and Resources (STAR) Network's 2017 conference at the Tanoa International Hotel in Nadi.

The conference is supported by the Geoscience Division of the Pacific Community and sponsored by Standard Concrete Industries (Fiji), XINFA Mines (Fiji) and the UNDP neglected development minerals project with support also from the Circum-Pacific Council.
SOURCE: FIJI TIMES/PACNEWS

Seabed mine will not be in breach of law: Nautilus Minerals

Staff Reporter | 5:51 PM | |
Canadian miner, Nautilus Minerals, asserts the world’s first deep sea mine to be developed in Papua New Guinea, says it will not be in breach of any international laws.

The company was responding to recent reports published by the Catholic Professionals Society, which had claimed there would be breach to the freedom of navigation by international vessels, if the project gets off the ground.

The Solwara-1 project, will be developed in the waters between New Ireland and East New Britain provinces.

In a statement sent to the Post-Courier, the Canadian miner said: “Nautilus would like to clarify that its operations will not be in breach of international laws.”

“While there will be an exclusion zone around its operations, it is only 1.25-km in radius.”

“This was determined by placing a 500 meter buffer around all mining areas.”

“This buffer area was approved by the National Maritime Safety Authority (NMSA) in September 2016, with the relevant information sent to the Australian Hydrographic Service for inclusion on the relevant charts,” the miner said.

Nautilus said the exclusion zone will ensure shipping does not interfere with mining operations, and will no way impede shipping passing through the St George passage (it doesn’t interfere with the Right of Passage as guaranteed by UNCLOS).

“This exclusion zone is no different to the exclusion zone around an oil and gas production platform, for which, there are thousands all around the world and they too are not in breach of international law.”

“Its position will be marked on maritime charts and will be noted by all vessels and vessel captains,” the firm further stated.

SOURCE: POST COURIER/PACNEWS

Court halts Panguna Mine signing

Staff Reporter | 9:35 PM |
A COURT has issued a restraining order to stop the signing of an agreement between landowners and the Autonomous Bougainville Government regarding the reopening of the Panguna mine.
Justice Ambeng Kandakasi issued the order at the Waigani National Court following an application filed by Philip Miriori, the chairman of the Special Mining Lease Osikaiyang Landowners Incorporated (SMLOLI).
He ordered that the parties to the proposed memorandum of agreement for the redevelopment of the Panguna mine were “forthwith restrained from signing the agreement”.
“If in the event the agreement has already been signed, the parties to that agreement and any person wanting to implement it are forthwith restrained from doing so,” Kandakasi said.
The signing of the agreement would have paved the way for the Bougainville Copper Limited to start work on the mine’s reopening.
The agreement was to have been signed last Friday but was cancelled after women from the area protested.
The court also restrained Lawrence Daveona from acting as the chairman of SMLOLI. The matter will return to court on Friday.
Justice Kandakasi said the order would remain in force unless the parties to the agreement could produce evidence that they had obtained the consent of the more than 500 block holders. The National

ExxonMobil PNG welcomes investigation result

Staff Reporter | 9:26 PM |
EXXONMOBIL PNG Ltd has welcomed the result of an investigation by the Independent Consumer and Competition Commission regarding its acquisition of InterOil.
It welcomed the conclusion reached that the transaction is not likely to substantially lessen competition in the domestic supply of natural gas. A company spokesperson said the company “is driving economic growth and is helping to produce significant, lasting benefits throughout the country”.
“We believe our involvement in the Papua LNG project will allow the operator Total to take advantage of synergies with PNG LNG to realise time and cost reductions that will benefit the government, co-venturers, landowners and communities,” the spokesperson said.
“We look forward to continuing dialogue with the Government in relation to third party access principles, domestic gas obligations and the maximisation of national value in new projects. ExxonMobil PNG is committed to delivering lasting opportunities to the people of Papua New Guinea.”
ICCC Commissioner and chief executive officer Paulus Ain said the multi-billion kina acquisition had negative impacts on competition in three potential markets.
They are the market for:


  • Third party access to natural gas pipelines and other field project facilities;
  • natural gas as alternate fuel for electricity generation; and,
  • Natural gas as input in the petrochemical industries and production of liquefied petroleum gas.

Inaugural petroleum, energy summit in PNG a success: Koim

Staff Reporter | 9:24 PM |
THERE has been a lot of interest from potential clients of PNG’s gas resource following the inaugural petroleum and energy summit early this year, an official says.
Gas projects coordination office director Peter Koim said the summit aimed to market the gas resource the country had, plus the supply from the new LNG projects.
“The reasoning why we brought in the petroleum summit early this year was to ensure that the hydrocarbon sector or the gas sector gets the prominence it needs,” he said.
“From the comments we have been getting, it’s been a great success. We already got the big oil companies here.
“With the PNG LNG project in operation, we got the four major projects on the board right now.”