Prospects
p. 10 · Read in the full issue
promising
LAST month’s attack at Mt Kare came just after discoveries that buoyed hopes the area could become a major oil producer. Results released in November found the SE Gobe 2 well flowed 8907 barrels of oil per day, surpassing the 8591 barrels per day from Kutubu’s Hedinia field.
Oil analysts said early results indicated the field could produce 30,000 to 40,000 barrels per day by the middle of the decade.
Command Petroleum, which has a 20 per cent stake in the field, relinquished its role as operator to MIM subsidiary Barracuda Pty Ltd, which also has a 20 per cent stake, on December 12. Other shareholders in ppl 56 are Southern Highlands Petroleum (50 per cent), Mountains West Exploration Inc (2.5 per cent), and Nomenco PNG Oil Co (seven per cent). Normandy Poseidon Ltd owns 41 per cent of Command Petroleum.
Major logistical hurdles include sheer isolation, rugged terrain, and an average rainfall of about four metres per year.
There are no roads and all machinery must be flown in by helicopter.
Pluses include proximity to Kutubu’s oil pipeline, just 15 km away, which will run 270 km to the coast and an offshore oil terminal in the Gulf of Papua when completed next year.
Meanwhile, Ampol Exploration and Oil Search Ltd signed a financing package to pay for their share of the Kutubu project. Seventeen international banks provided SUS 324 million in the first PNG project finance loan since the giant Ok Tedi copper and gold mine.
Ampolex holds 16.5 per cent of the project while Oil Search has a 7.8 per cent stake. Chevron Nuigini and BP have 19.4 per cent each, BHP (9.7), and Mitsubishi (4.8). The PNG government will also hold a 22.4 per cent stake in the completed project. □