P’nyang project talks resume
Oil Search says discussions on the P’nyang gas project in Western have resumed.
In its 2020 first-quarter report released on Tuesday, Oil Search noted that an agreement was needed before the LNG expansion could move into the front end engineering phase.
“Formal negotiations between ExxonMobil, on behalf of the P’nyang co-venturers and the PNG Government on the P’nyang gas agreement were suspended in late January,” the report said.
“Discussions have resumed with the State, aimed at reaching an agreement that is fair and balanced for all stakeholders.
“This agreement is required before the LNG expansion project can move into the feed phase.
“Oil Search remains committed to progressing the three-train integrated expansion project, a highly cost-effective development, at the appropriate time.”
The petroleum company also noted that it had started a series of measures in response to the Covid-19 outbreak, realising that review was underway for further cost-cutting.
“Oil Search established a multi-disciplinary Covid taskforce in February to prepare comprehensive plans to mitigate the potential impact of the virus on the health and wellbeing of company staff, contractors and the local community and to support business continuity for production from Oil Search’s operated assets.
“During the quarter, the company started a series of measures, including suspending discretionary activities, demobilising non-essential staff from the field, implementing revised field rotations for expatriate staff, establishing quarantine zones in the field and isolating business essential personnel, increasing medical and field supplies and introducing infectious disease protocols.
“ExxonMobil, as operator of the PNG LNG project, has implemented similar measures, consistent with recommendations from the PNG Government, the global health authorities and ExxonMobil practices.
“Oil Search has taken steps to reduce corporate overheads, including reducing the headcount across Sydney and Alaska by more than 100 and implementing salary cuts at the board, executive and senior management level.”
The report said in addition, a systematic review was underway to further reduce operating and corporate costs and improve the productivity of the firms operated assets.