State, partners hold discussions on P’nyang project
Informal discussions were held between State and development partners for the P’nyang gas project in Western, after initial suspension of negotiations earlier this year, according to Oil Search.
The company, in its second quarter report for this year, said following the suspension of the P’nyang gas agreement negotiations between the State and ExxonMobil at the end of January, exploratory informal discussions were held with the Government, aimed at reaching alignment on terms that were fair and balanced for all stakeholders. These exploratory discussions were completed in May and the government and ExxonMobil then re-engaged on the P’nyang gas agreement.
Due to the Covid-19 and its impact on oil and gas prices, Total and ExxonMobil demobilised the majority of their LNG expansion technical and commercial staff.
Meanwhile, according to the report, Oil Search’s other operating costs were anticipated to be between US$40-50 million (K135.47- K169.34 million) for the first half.
This was lower than in the same period of 2019, reflecting higher inventory balances as of June 30, a reduction in Hides GTE (gas to electricity) hydrocarbon purchases and lower royalties driven by the fall in realised oil and gas prices, partly offset by one-off exit costs of approximately US$600,000 (K2.08mil) associated with Sydney-based employees who had left the company in the reorganisation.
Also, Oil Search’s full year 2020 investment expenditure guidance of US$440-530 million (K1.49bil -K1.75bil) remained unchanged, with between US$120-210 million (K406-K711.26mil) expected to be incurred in the second half of 2020.
Key activities would include:
Various risk reduction and facilities optimisation activities at the Oil Search-operated oil production facilities;
PNG LNG project development activities at Angore;
Optimisation engineering for the Pikka Unit Development and ongoing summer season early works activities; and,
Progressing LNG expansion activities in PNG.