OSH 0.99% $4.01 oil search limited

gas projects will succeed - interesting snippet

  1. 840 Posts.

    An interesting little snippet that appeared in a copy of the PNG The National last week.

    Gas Projects Will Succeed Ambitious Plans Being Laid By Oil Search.

    By Brian Gomez.

    The coming of age of Oil Search Ltd as an oil industry operator comes at a time when Papua New Guinea is on the cusp of becoming a significant gas producer.

    Even if the US$1.7 billion project to pipe natural gas to Australia fizzles out - Petroleum and Energy Minister Sir Moi Avei has expressed confidence contracts about to be signed will make it a goer - Oil Search is determined to lead the way into a new era of gas development.

    Investments of a similar order will be needed for a number of projects that have already been deemed to be viable on the basis of preliminary studies.

    However, Oil Search managing director Peter Botten told The National in a telephone interview yesterday that the gas pipeline project remained the top priority.
    He said that unless contracts were sealed in the next few months, PNG would miss the boat on the 2006-07 window of marketing opportunity in Australia.

    "We have to get after this project," he said, but declined to be drawn into speculation on whether additional gas contracts would be signed shortly.

    Sources have suggested that Alcan's alumina and aluminium complex at Gove in the Northern Territory, a possible contract with the Northern Territory Government and one or two other customers would enable the gas joint venture to give it the green light.
    If this did not happen, Oil Search has a number of projects that could be developed within the next few years. These would also involve large investments.

    They included:

    A petroleum liquids stripping facility at its Hides gas field costing around US$400 million and producing 27,000 b/d of condensate. Engineering and design studies could start in the second half of this year with production in 2006.

    The Japanese Government has agreed to assist with funding for a feasibility study for a US$800 million methanol plant that will use natural gas as a feedstock. Methanol is increasingly being used as a blend with petrol.

    Compressed natural gas could be produced from two fields at Kimu and Uramu to replace expensive diesel and fuel oil electricity generation in PNG and other Pacific Islands such as New Caledonia and even in the Northern Territory. A feasibility study will be completed in June.

    Studies are underway for a gas pipeline to Port Moresby from the Uramu field in the Foreland.
    Besides the wide-ranging studies, Oil Search has undertaken, the company is also considering the feasibility of developing the South East Manada and Manada oil field, which is estimated to contain some 50 million barrels of oil.
    Mr Botten said further appraisal and development drilling would be needed with development possible in 2005 at the earliest.

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