OIL SEARCH has called for greater cooperation between the proponents of Papua New Guinea’s two liquefied natural gas expansion costs as production rose and revenue fell in the first quarter of 2016.
Managing director Peter Botten said the government would also benefit from the ExxonMobil-led PNG LNG venture and the Total-led Papua LNG venture working together.
“Oil Search believes that cooperation between, and possibly an integration of, these two potential developments, is essential to maximise value and avoid high-cost infrastructure duplication in PNG,” he said.
“There are a wide range of development activities which, if pursued in a coordinated and cooperative manner, could generate material value, with benefits not just from lower costs but also from ongoing operational synergies and potential schedule acceleration.”
ExxonMobil, Oil Search and partners in the PNG LNG project carried on preparations for futher drilling on the P’nyang field during the quarter to add new sources of gas to the project, with talks continuing between project partners to finalise outstanding issues.
Further appraisal of the Papua LNG project’s Elk Antelope fields continued, with project partners expecting to decide whether to drill a further appraisal well, Antelope 7, by mid-year.
Compared to the fourth quarter of 2015, Oil Search recorded a 3 per cent rise in total production to 7.72 million barrels of oil equivalent (MMboe) and a 13% rise in total sales – at 7.97 MMboe.
Oil Search said it was on track to deliver annual production of between 27.5 and 29.5 MMboe, within its guidance range.
Despite this, weaker commodity prices meant total revenue fell to US$313.1 million, down 9% on the previous quarter and down 34% from the same time the previous year.
Total sales revenue for the quarter was US$289.9 million, down 8% on the previous quarter.