At the end of last year, the PNG Gas project looked dead and buried after foundation customer AGL signed $2 billion worth of contracts with incumbent Australian gas producers. After the decision, the recriminations began with the PNG government accusing project operator ExxonMobil of duplicity. However, the project got itself a reprieve after diversified NT miner MIM signed up to buy gas for its zinc operation.
As for PNG Gas's main rival, the Sunrise project in the Timor Sea, while officials did not reach agreement on the fiscal and legal regime that will govern development of the 8 trillion cubic feet of resource by the end of last year as stated, they are hopeful they can reach agreement early this year.
While Sunrise and PNG Gas struggle, the news just keeps getting better for the North West Shelf and the Burrup Peninsula, which looks set to host the world's biggest ammonia plant after Indian-backed Burrup Fertilisers secured $630 million in financing for the project. Meanwhile, GTL Resources (Liquigaz) got environmental approval for its million tonne per year methanol plant.
Out in the moose pastures, Santos confirmed a successful gas discovery in PNG after recording flow rates of around 2000 barrels per day from its Bilip-1 well. Not so lucky was Stuart Petroleum and Cooper Energy with their Cooper Basin wildcat, Karbine-1, which was P&A after logs showed non-commercial quantities of gas. Perth Basin wildcat Jingemia-1 has been shut in for long term buildup after positive flow test results. Further north, Woodside's appraisal well Laverda-2 logs indicated a gas bearing interval. The ENSCO-56 drill rig started drilling Dawn-1 (west of Barrrow Island) for the Harriet Joint Venture.
Development of the Tauton oil field, Carnarvon Basin, will also proceed after successful flow tests, according to Apache Oil and Pan Pacific. Mosaic and Santos told the market they had struck gas with their Churchie-1A sidetrack. In the same breath, the two said construction of a pipeline that will connect the Churchie field with the Queensland gas grid should commence early in the New Year
In the markets, Indonesian-focused Kalrez Energy, which has undergone a managerial reshuffle of late, had a timely oil lift from its Bula Field. The company was the recipient of a cash call in September from its partner Kufpec and this lift will go a long way to helping the Perth-based energy player meets its obligations.
Energy Development (ENE) shares rose after the company told the market it was the target of a conditional bid from ABN Amro and former chairman and founder Walter Pahor. However, shares in the ENE took a dive shortly afterwards when ABN Amro said it had not made any bid for the struggling power company.
In international news, oil prices reached their highest level in two years thanks to the turmoil in Venezuela and the continued US military buildup in the Gulf for a possible showdown with Iraq. However, OPEC said it would hold a meeting to discuss the possibility of increasing oil supply, which did pull back oil prices somewhat.
Oman said it would invest billions to increase oil production in the Sultanate while in Africa, foreign investors plan to spend billions in Nigeria. However, one foreign investor looking to exit African is Canadian energy giant Talisman, which said its planned withdrawl from the war-torn nation of Sudan would be delayed by up to a month. Meanwhile, Horizon Oil (formerly Bligh Oil) has commenced drilling in Tunisia.
