Oil Search, ExxonMobil buy exploration acreage offshore PNG

Oil Search and ExxonMobil, partners in the US$19 billion PNG LNG project, have agreed to purchase acreage in the Gulf of Papua from a company owned by China’s CNOOC Limited.

The two companies entered into agreements with Gini Energy Limited to acquire each a 40% interest in PPL 374 and PPL 375, located approximately 150 kilometres south of Port Moresby in the deep water section of the Gulf of Papua. Gini will retain a 20% interest in each licence, Oil Search said in a statement on Monday.

The licences cover a combined area of 24,936 km2 , with water depths ranging between 1,000 and 2,500 metres.

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 licences.

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. Entering these licences is consistent with the company’s strategy to focus on areas that have the potential to support the company’s expanding LNG portfolio.”

The completion of the farm-in agreements and the acquisition of the licence interests is subject to conditions precedent, including regulatory approvals.