OIL SEARCH LIMITED Oil & Gas Projects Major Rejuvenation PNG MPI Conference 2004
Summary Oil and Gas Projects - Major Investment - Significant Rejuvenation of Operations and Activities Driven by new operating focus Helped by oil price Biggest investment in operations since Kutubu development in early Nineties…
Summary Core Activities Safety continued world class safety performance Production Optimisation Added 10000BOPD Production Capacity at Kutubu, 50% Production, mitigating decline New oil pool discovered (Iagifu Reservoir) after 12…
Summary Core Activities Replenishment of Exploration Portfolio Seismic Acquisition New approach to drilling and logistics Active programme, with more to come Exploration Some key wells Significant reduction in operating cost…
Summary Core Activities Gas Commercialisation PNG Pipeline Project FEED Other Gas Options Staff and Community Issues Emphasis on staff training, OSH Academy Staff and community health New approach required
Oil Search and PNG Commonality of Interests OSH largest explorer, developer and investor in the country Government the largest shareholder in OSH OSH contributes 18% of PNG government revenue and up to 28% of the countrys of exports…
Investment Recent History US000 DEVELOPMENT DEVELOPMENT YEAR EXPLORATION GAS CAPEX OPEX 2005 83,000 180,000 110,000 40,000 2004 43,000 67,000 106,000 7,000 2003 44,000 35,000 115,000 10,500 2002 9,000 111,000 86,000…
Production Optimisation
Kutubu Status Key 2004 Achievements Work in 2003-2004 has IDT-9ST2 - finds major Iagifu oil pool revealed many regions 1,500 bopd of follow-up potential IDT-4ST1 - finds major Toro oil pool 3,000 bopd Continue to focus on IDT-5…
Kutubu Appraisal Iagifu IAGIFU - Iagifu A Structure IDT 9ST2 Upside Contacts Drilled May-August 2004 Completed August 2004 First ever Kutubu completion in the Iagifu sands Prodn continues at 1,500 bopd Iagifu 6X IDT9 Iagifu…
Kutubu Saddle Development IDT4ST1 proved the presence of a significant pool of undrained Toro oil in the saddle area of the Iagifu- Hedinia field Further drilling will prove up the extent of the pool
Moran Status Moran Gas Injection Rates 120,000 Key 2004 Achievements 110,000 Increasing injection trend 105 mmscf/d being achieved 100,000 M6 brought on line via TPS 90,000 Gas Injection Rate (Mscf/d) M10 drilled, completed…
Production Moran 10 732000 734000 736000 738000 02 M10 Development Drilling -5 Pad Location 09 M6st2 00 OW Existing reservoir location M -5 C ai 00 -1 M n 96 2 ora Th M10 (MS) Location Appraisal of downdip J block Toro…
SE Gobe Status Key 2004 Achievements Field is mature; production SEG6ST1 on continuous constrained by gas production handling capacity Water disposal upgrade project nearing completion Focus on Sand control study Equipment…
Gobe Main Status Key 2004 Achievements Field is mature, Manage/optimise existing production constrained production wells by gas handling capacity G8XST3 workover and and water handling recompletion to water capacity injection…
Development Accelerated
SE Mananda Development MANANDA Field discovered in 1991 by Chevron, but: HEGIGIO ATTIC GORGE MANANDA NW MORAN No development activity by Chevron to 2003 FOOTWALL No development plan even after 2002 seismic SE MANANDA…
NW Moran Development NW Moran 1X well Successful appraisal of the NW extension to Moran Toro and Digimu reservoirs Moran 10 tested at 3000 bopd NW Moran 1X Moran Field ST5 M ST4 ai n Th ru st M4/6/9 Pad NW Moran…
PNG Exploration Drilling
PNG - Exploration Drilling 2004 Exploration Well SE Moran 1x Dec 03-January 04 Dry hole First well drilled by OSH in Highlands as Operator SE Moran 1x Achievements PDL2 PPL219 No LTIs Definitive test of SE extent of Moran…
Exploration Drilling Kapul Rig move in progress Planned spud 10th December Relatively simple well Important test of Foreland oil potential (100mmstb) Trying to open up new play which would have huge implications for Gulf…
PNG - Exploration Seismic Major seismic program Mananda/Arakubi program March-August 04 No LTIs 48km acquired 4 prospects/leads addressed Wasuma/Wabi program October 04 -January 05 Planned 70km 4 prospects/leads addressed Line…
Drilling Operations Well Designs Step change in approach Fit for purpose drilling rigs 13-3/8 -- 9-5/8 Benefits Fit for purpose well designs Better hole stability Less mud & cement Rig 2 9-5/8 -- 7 Less casing & wellhd OSL…
PNG 2005 Exploration Future Exploration Drilling Mananda Attic Seismic is focussed on Mananda Attic Mananda/Footwall Wasuma Arakubi Mananda FW Wasuma Arakubi Wabi Bilip Footwall Wabi Other activities Bilip FW Airborne…
Probable Drilling Schedule 2005-2006 2005 2006 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun B Rig 226/New Rig Kutubu area Firm IDT 22 IDT 23 IDT 24 Contingent IDT 25 IDT 26 exploration New rig…
Gas Commercialisation
Gas Commercialisation PNG Pipeline Project into FEED Important step towards Project delivery Other Options Significant progress made top mature in country options
Staff and Community Issues
Staff and Community Issues Series of New Initiatives Emphasis on Growth in Business Career Development and Staff Training Improve depth of skills base Keep and attract talented workforce Emphasis on HSES with health a core area…
Production Outlook with Continued Investment Production decline continues PNG Oil Production Forecast 2004-2008 No investment Decline mitigation only possible 70,000 through detailed, dedicated 60,000 approach to field management…
Conclusions Major Rejuvenation of Activities and investment in PNG Mature areas Delivering production growth Improved profitability and value Exploration accelerated 2005/06 Business run for sustainability and growth
Delivering the Gas Vision PNG Investment Conference Sydney 6 December 2004
Delivering the Gas Vision 3 elements Making PNG Gas Project work Establishing a cornerstone demand in PNG Exploring market niches in the Pacific region bringing gas developments to fruition, together or as standalone…
Our Stepping Stones for Gas Development Stand Methanol Alone or PNG Gas DME CNG to NZ complementary Project Projects Fertiliser Gas to Others Ammonia Liquids under study Cheap Power Derivative Third Industries Wave…
Gas Commercialisation 2004 Major Focus on: PNG Gas Project covered by others MeOH/DME A market leading DME/methanol plant at Napa Napa Potential for co-locating other plants GtL Potential value adder in high oil price…
Progress in 2004 9Into FEED for PNG Gas Project 9Hides accelerated production being examined DME/methanol: moving closer to Full Feasibility CNG: Pre-Development Agreement, Stage 2 pending GtL: preliminary results/options being…
Delivering the Vision (1) PNG Gas making PNG Gas Project work PNG Gas Project provides initial Australian market penetration at plateau, plus growth, and: Provides material, longterm market positioning in Australia for Oil Search…
Delivering the Vision (2) - DME . Establishing cornerstone demand in PNG DME plant at Napa Napa would co-produce methanol/DME Partnering with MGC/Itochu is strategic for DME entry to Japan circa 2009 analogous to Japan LNG 20…
Delivering the Vision (2) - GtL . other plants and synergies for PNG .. New technology application for gas in PNG Gas to Liquids may add value in high oil price scenario Feasibility studies with Syntroleum Plant location and concept…
Delivering the Vision (3) CNG .... exploring market niches in the Pacific Regional partnering in the Pacific Delivery competitive ex Gladstone or ex PNG 20-60+ PJa in NZ expected from circa 2009 Can the NZ market be serviced from…
Hides Standalone Recycle Integrating accelerated liquids principles/reinjection into PNG Gas planning On hold as PNG Gas Project is progressed May be reactivated on short notice
Conclusion 2004 - a year of activity in gas PNG Gas Project FEED a major step toward gas commercialisation Progress on CNG, Methanol, GtL & Hides Recycle Several paths running in parallel Strong focus on PNG Gas Project…
The Future For Gas Gas/Power to Mines Kutubu, Hides, Gobe Main, Moran, SE Hedinia, Juha, Angore (Fields and facilities over time) PNG Gas Facilities Recycle Facilities Barikewa Kimu (dry) Kopi HALL SOUND Kerema…
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