Oil Search enters deal with Chinese firm

OIL Search (PNG) Limited, the subsidiary firm of Oil Search, has entered into agreements with Gini Energy Limited, to acquire a 40 per cent interest in each of Petroleum Prospecting License (PPL) 374 and PPL 375. Gini Energy Limited is owned by Chinese state owned energy firm CNOOC Limited. These licenses are located approximately 150 kilometres south of Port Moresby in the deep water section of the Gulf of Papua, PNG, and cover a combined area of 24,936 km2, with water depths ranging between 1000 and 2500 metres.

Oil Search said in its market report that ExxonMobil would also acquire a 40 per cent interest in each license while Gini will retain a 20 per cent interest. It said this is subject to conditions precedent that operatorship of both licenses will transfer from Gini to ExxonMobil. Commenting on the farm-ins, Oil Search’s Managing Director, Peter Botten, said: “During 2015/16, we undertook a comprehensive study of exploration opportunities in PNG.

This work identified the offshore Papuan Gulf as an area where there is significant gas potential, with several multi-tcf gas leads and prospects already delineated in these licenses. “We are delighted to be partnering with ExxonMobil, which has significant experience in exploration and production in deep water, and we also welcome the opportunity to work with CNOOC Limited for the first time,” Mr Botten said. “Entering these licenses is consistent with the company’s strategy to focus on areas that have the potential to support the company’s expanding LNG portfolio,” he added. The completion of the farm-in agreements and Oil Search’s acquisition of the license interests is subject to conditions precedent, including regulatory approvals.