Comparison of Incident Rates LTIR AND TRIIR OF VARIOUS AUSTRALIAN OIL & GAS COMPANIES/APPEA 20.00 LTIR TRIIR 18.00 16.00 LTI & TRII Rates per 1,000,000 Hrs 14.00 12.00 14.84 2002 Compilation of 2004 July Rates all…
Agenda Item Presenter 9.00am Welcome Peter Botten 9.05am Highlands Gas Project - Description of project, FEED process & Bob Marcellus integration with existing operations - Gas marketing Paul Cholakos - Costs and financing Nigel…
Highlands Gas Project Introduction
FEED decision Joint venture participants have decided to move into the Front End Engineering and Design (FEED) phase on the Highlands Gas project (HGP). This follows: The signing of two additional conditional gas sales contracts, with…
Importance of FEED Decision Entering FEED provides much greater certainty for currently contracted and potential gas customers that the project will proceed FEED decision is expected to precipitate further gas sales agreements If it…
What does FEED comprise Finalisation of design and engineering work including configuration of field and processing facilities, pipeline route Preparation of bankable cost estimates Preparation of tender documentation Continued…
Gas Commercialisation Highlands Gas Project FEED activities have commenced with: Resourcing being put in place Development optimisation work (liquids acceleration) underway FEED expected to take 12 months Project Sanction / Financial…
Gas Commercialisation Highlands Gas Project Key FEED activities : Finalisation of Project Agreements State Participation/ Regulatory Approvals Gas marketing agreements Gas Transportation Agreements In country Community…
Gas Commercialisation Highlands Gas Project Key FEED activities : Design basis definition Risk assessments Project Execution Plan Environment Plan / Management Procurement Plan Class 3 cost estimate
Gas Commercialisation Highlands Gas Project Activities in Houston, Brisbane and PNG Staff numbers 50 in Brisbane Gas and Oil personnel integration in PNG Engineering contract to be bid
Gas Commercialisation Design Concept Total 650mmscfd Gas Production HIDES facilities production Multiphase Full Condensate Recovery pipeline 600mmscfd KUTUBU CPF Oil production & AGOGO 165mmscfd gas CPF Additional condensate…
Highlands Gas Project Location
Highlands Gas Project Upstream Technical Configuration The following fields will be produced for the HGP Hides to be substantially expanded Kutubu gas currently being reinjected will be exported Hides condensate will be stabilised…
Highlands Gas Project Upstream Technical Configuration The Upstream (PNG) portion of the HGP involves the following basic elements Up to four new wells at Hides with field roads, a gathering system and support infrastructure Raw gas…
Highlands Gas Project Gas Marketing
Gas Markets Status Current agreements for volumes of 58 to 120 PJ/annum anticipate 70 100 PJ/annum confirmed by Financial Close By Financial Close, require agreements for volumes building to total circa 150PJ/annum build to plateau…
Australian Market Perspectives Forecasts show a growing supply gap Significant demand is supply driven. ie. will only materialise if substantial conventional gas supply is available Alcan Gove various cogen plants Comalco, QAL WMC…
SE Australian Gas Market without PNG Gas Insufficient supply drives prices up, allowing more expensive sources to be produced Assumes significant CSM production but viability at these levels yet to be established 1400 1400 Australia…
SE Australian Gas Market with PNG Gas Assumes significant CSM production but viability at these levels yet to be established PNG placed to fill market gap 1400 1400 Australia Supply by Basin Supply shortfall due Potential…
Gas Markets High Confidence of Reaching Target High certainty of capture by Sanction Build over +/-5 years Plateau at circa 150 PJa Small number of large customers: Comalco Stage 1 & Energex QAL WMC CS Energy Mt Isa (post-SWQ)…
Gas Markets Sales Update - Negotiations Complete Energex Retail / Comalco Alumina - (24-60 PJ/a) Various aggregator loads and Comalco alumina refinery Comalco stage II timing WMC (Industry / 12-20 PJ/a) For Olympic Dam power and…
Gas Markets Possible Capture by Financial Close North West Queensland (+25PJ/annum) Existing contracts expire 2012-2014 Project will engage re these loads now it has entered FEED Major users are CS Energy/Xstrata and WMC Aggregators…
Gas Markets Highlands Gas Terms are Competitive HGP has agreed commercial terms with Queensland power, mining/industrial, and aggregator (CS Energy, Comalco, QAL, Energex) southern aggregators ex Moomba (AGL, TXU) and South…
Coal Seam Methane CSM has taken significant steps in Queensland in recent years legislative framework Townsville power station award CS Energy and IncitecPivot investments in CSM juniors or fields Conventional gas reserves,…
Gas Markets Summary Required volume has been reduced through revised design Volumes need to be certain by Financial Close but can build to plateau over initial production years FEED entry provides confidence on timing High confidence…
Highlands Gas Project Costs and Financing
HG Project Development Expenditures Total OSH Project Share Timing (USm) Development Cost to 1st Gas (2006- -Field Development & 803 379 2008) Processing 675 318 -PNG Infrastructure (203) (96) -less 3rd Party Infrastructure 1275 601…
OSH Funding Requirements Funding Sources FEED Share: Cash reserves Up to US55 m XOM Gas Option: Cash reserves and committed Up to US120 m corporate debt facility Development Costs: Project recourse term facility of up c. US600 m to…
Oil Search Corporate Funding Capacity Company balance sheet very robust zero gearing and cash reserves of c. US190 m US100 m committed revolver currently undrawn and does not expire until December 2007 Oil revenues very strong and…
Project Financing Plan Assumptions Committed Amount: c. US450 m, based on 212PJ case Facility Term/ 13 year term loan with 9 year Repayment: amortisation First Drawdown: 1Q 2006 Drawdown Period: 4 years from 1st availability Gearing…
Sources of Project Debt Finance Commercial banks to provide primary funding commitment, subject to sufficient PRI cover right sector, geographical growth area, banks asset hungry and opportunity poor in resources OSHs existing…
Project Financing Milestones Indicative Key Milestones Timing 2004 October Commence FEED November Appoint financial adviser 2005 1st Quarter Select lead arrangers and commence PF syndication process 3rd Quarter Finalise facility terms…
Initial Project Financing Activities Defining the overall Gas project financing strategy Developing a detailed financing risk matrix and consequent risk mitigation strategies Identifying inter-creditor issues arising from the existing…
Agreement with ExxonMobil Under an option agreement, Oil Search to purchase up to 400 PJ gas and liquids from ExxonMobil, if project reaches sanction prior to June 2006 Gas, sourced from Hides field, will be dedicated to developing…
Highlands Gas Project Other Gas Options
Future for PNG Gas Location of Highlands Gas fields and potential production facilities (1) Barikewa field Kimu field Kopi Gas Sales to Australia via Hall Sound (2) Gladstone and Uramu field Port Moresby (3) Moomba…
Our Stepping Stones for Gas Development Stand Methanol Alone or Highlands Gas DME CNG to NZ complementary Project Projects Fertiliser Gas to Others Ammonia Liquids under study Cheap Power Derivative Third Industries Wave…
Oil Search Gas Commercialisation Approach Major Focus on: Highlands Gas Project (HGP) already covered MeOH/DME A market leading DME plant at Napa Napa CNG A Pacific regional solution to energy imbalance GtL Potential value adder…
Progress in 2004 9 Into FEED for Highlands Gas Project 9 Hides accelerated production being examined Methanol/DME: close to Full Feasibility CNG: PDA Stage 2 pending GtL: preliminary results promising Approaching FEED for Hides…
Delivering the Gas Vision (1) HGP accounts for 150-200 PJa at plateau, plus growth, and: Provides material, long term market positioning in Australia for Oil Search Provides the infrastructure spine for complementary gas…
Delivering the Vision (2) - DME In country gas use is complementary DME plant at Napa Napa PNG is a contender for DME entry to Japan Partnering with MGC/Itochu is strategic Circa 60-80 PJa; co-producing methanol/DME Relationship…
Methanol/DME Project Status Pre Development Agreement signed in April facilitates FEED in 2004 given certain prerequisites Preferred location selected (Napa Napa) co-location with others preferred gas supply choices Project or non…
Methanol/DME Activity in 2004 Increased in country activity site investigations and assessments Site choice, logistics and infrastructure Managing community affairs Continuing commercial work Project structure, agreements,…
Delivering the Vision (3) CNG New technology & regional partnering CNG to NZ is attracting interest Potential 20 PJ/a increments (eg 1 ship) Bite-sized entry for finance & technology Add ships to meet actual supply/demand gap 20-60+…
CNG for NZ Project Oil Search led initiative with EnerSea & Itochu Pre-Development Agreement signed in June Facilitates FEED entry if certain prerequisites met EnerSea is a leading CNG technology provider CNG is safe and…
New Zealand Energy Outlook PJ Energy Supply/Demand Forecast 350 300 250 200 150 100 50 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Shell Supply…
CNG to NZ Project Status Recent JV meetings in NZ confirmed high level of interest - reviewed comprehensive transportation economics Tariffs/costs of transportation and storage Reduced appreciably from initial indications Storage…
Delivering the Vision (3) - GTL New technology application complements HGP Gas to Liquids can add value in high oil price scenario Syntroleum and Oil Search initiative Plant location and concept definition continues Barge in Omati Gulf…
GTL Feasibility Study Joint Feasibility Study by OSH and Syntroleum progressing on schedule for December completion Mid Project Review held in PNG early October Site visits with Syntroleum staff Review of study progress and forward…
Hides Recycle 660 MCF/d stand-alone cycling scheme has been worked for some time by Oil Search as a back-up plan to the HGP FEED planning continues: technical work continues Resolving marketing issues on condensates Updating capital…
Forward Plan to YE 2004 HGP FEED related activities: in-country FEED role for OSH, and leadership with XOM in all other HGP arenas Increased Project resources and spending from Oct 1 Major Oil Search initiative to: Increase resources…
Conclusion 2004 - a year of activity in gas Highlands Gas FEED major step Focus on CNG & Methanol Several paths running in parallel Complementary to Highlands Gas Project With Potential as stand-alone developments 2005 a year of…
PNG Production
Kutubu Key Activities Progress CTU workover IHT-1A Feb IHT-1A workover - successful Seismic survey 1H 2004 IDT-9ST2 - finds major Iagifu oil Drill IDT-9ST2 May-Aug pool Drill IDT-4ST1 Sept-Oct IDT-4ST1 - finds major Toro oil pool…
Kutubu Appraisal I IDT 9ST2 PN99-408 PN96-IAG2 IDT9 ST2 Drilled May-August 2004 NW Iagifu Structure: appraisal target Completed August 2004 Key elements Main Backthrust IDT 9 IDT 11 Iagifu 6x Fault First ever Kutubu…
Kutubu Appraisal II IDT 4ST1 IHT 3 IDT 8 Drilled October 2004 IHT 2 IST 1 Completed October 2004 Hedinia 3XST2 IST 2 IDT 7 Discovers major undrained IDD 4 IHT 1A IDT 6 Toro oil pool Hedinia 3X IDT 5 Iagifu 7X IDT 14 IWT…
Moran Key Activities in 2004 Activity Progress M2 CTU cleanout Jan M2 back on prodn - 22 February M6 TPS obtain approval M6 TPS test carried out in May/June. M4 conversion to gas injn - May After TPS test M6 onstream. M10 drilled &…
Moran Gas Injection Gas Injection Activities A Block Injection Rates and Downhole gauge pressures 70,000 4,000 APF debottlenecking initiatives have Increasing reservoir pressure 3,800 resulted increasing plant throughput 60,000…
Production Moran 10 732000 734000 736000 738000 M10 Development Drilling 02 - 50 Pad Location 9 M6st2 00 OW Existing reservoir location M - 50 C ain Appraisal of downdip J block Toro -1 M 0 96 or Th 2 M10 (MS) Location an…
Gobe Production OSH adopted an aggressive policy of Optimisations pursued ongoing minor expenditure to realise Utilised CTU to regain oil production additional value from relatively mature thru stimulation & sand cleanouts Water…
PNG Developments NW Moran & SE Mananda
SE Mananda Development MANANDA HEGIGIO ATTIC GORGE MANANDA NW MORAN FOOTWALL SE MANANDA MORAN SE MANANDA PROPOSED PIPELINE AGOGO CPF MORAN PIPELINE KUTUBU CPF
SE Mananda Development Background Field discovered in 1991 by Chevron, but: No development activity by Chevron to 2003 No development plan even after 2002 seismic acquisition In less than 18 months OSH have: Completed a comprehensive…
SE Mananda Development Background Project Drivers and OSH commitment: 10,000 bopd, 10 mmbbl production over 6 years Bringing SE Mananda onstream leads to reduced shared opex costs of all producing oil fields Potential benefits for…
SE Mananda Development Concept Primary depletion through 3 new wells and workover of 1X well 3 new wells to be drilled from 1 new centrally located well pad, west of 1X well pad Wells produced to Agogo Production Facility via 8 flowline…
Hegigio Bridge ADD 1 North the lookout Abutment 470m
SE Mananda Development Status Front End Engineering Design completed Subsurface studies complete Drilling and surface facilities engineering, procurement and construction tendering activities in progress and on schedule Concessionary…
NW Moran Development NW Moran 1X well Successful appraisal of the NW extension to Moran 10 Moran NW Moran 1X 3 sidetracks; comprehensive data acquisition; Toro and ST5 ST4 M ai n Th Digimu successfully ru st…
NW Moran Development NW Moran EPT Project Moran Field Fast track development 17 months discovery to M4/6/9 Pad first oil NW Moran flowline DPE have approved 12 month EPT to assess Potential NW Moran Injector residual…
NW Moran Development View back to Moran 4 pad Flowline Route
Exploration PNG
Current PNG Exploration Activity PPL233 PPL219 PDL4 PDL2 PPL190 PPL240
Kapul Prospect Top Iagifu (reservoir) Depth Map 130 mmbo mean resource PPL240: Kapul PPL 240 PN91-122 PN91-117
Kapul Prospect Seismic (Dip) Line PN91 122 S Proposed Kapul-1 N 0.2 T Carb Near top K FZ B Carb Wedge B Carb 1.0 T Toro T Iagifu Basement TW T (sec) 2.0 0 2km 3.0
Exploration Seismic Major seismic program to mature opportunities for 2005-06 drilling Mananda/Arakubi program March-August 04 No Loss time incidents (LTI) 48km acquired Cost c.US5mm Wasuma/Wabi program Planned 70km to start shortly…
Exploration Middle East/North Africa Measured diversification into Middle East/North Africa to continue, following success at Nabrajah, Yemen Low cost drilling (US2-3 million per well) complements higher PNG costs 5 exploration…
2004-5 Exploration Activity Middle East/North Africa OSH is continuing its measured diversification into the Middle East/North African region: Active drilling programme in Yemen Block 43: Meshat-1, Nabrajah-1, Neheb-1 Appraisal of…
2004-5 Exploration Activity Yemen
2004-5 Exploration Activity Block 15 Yemen 2,000 sq km 3D seismic programme has delivered portfolio of material Prospects and Leads: 20 P & Ls Diverse range of plays Total portfolio potential mean reserves 2 billion barrels oil Four…
2004-5 Exploration Activity Block 15 Yemen (50% operator) Sarar-1X Recovered 1700 litres 45API oil from Cretaceous sands Ras Ghashwah-1X Recovered 38 API oil from Hami-1X fractured Eocene Limestone Heavy oil and bitumen…
2004-5 Exploration Activity Riyan Prospect Block 15 Early Miocene Mud Debris Fm Riyan-1 Seismic line 21Ma seismic horizon Oligocene clastics Riyan-1 21Ma seismic horizon Large, well imaged rotated fault block…
2004-5 Exploration Activity Sharhuyr Prospect Block 15 Large, pre-rift footwall raft Target is Cretaceous carbonates and clastics 350m water depth 1,850m well US15.0MM Mean oil reserves 164 million bbls POS 13% 30 day well…
2004 Exploration Activity Block 35 Yemen (46% Operator) Completed 366km 2D seismic programme in March 2004 Plan to drill Al Ahkaf 1 exploration well in Block 14 Nexen 230,000 bopd November 2004 Al Ahkaf 1 Prospect Nabrajah…
2005 Exploration Activity Al Ahkaf-1 well Al Ahkaf-1 location 57 mmbbls Qishn horizon Qishn horizon Al Ahkaf Source kitchen Basement horizon Al Ahkaf-1 location 63 mmbbls Seismic cline Qishn Sandstone and…
2004 Exploration Activity Nabrajah Discovery Block 43 Status: Nabrajah-1 flowed 2000 bopd, 2.4MMscf gas from Qishn S2 Meshat-1 Sandstones Nabrajah-2 flowed 1423 bopd from Qishn S2 sandstones Nabrajah-1 Nabrajah-2 also flowed…
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