PNG

Oil Search to ditch non-PNG assets

OIL Search has confirmed that it plans to offload non-core assets to focus on the $US10-11 billion PNG LNG Project, which will commercialise the company's vast gas reserves.

Oil Search to ditch non-PNG assets

"The MENA (Middle East-North Africa) portfolio will be rationalised," the Sydney Morning Herald quoted Oil Search managing director Peter Botten as saying.

"There is strong competition for capital within our organisation ... A much more aggressive management of the portfolio is anticipated over the next few years."

Oil Search said assets to be divested were likely to include exploration and production license in Yemen and Egypt, the farm-down of frontier acreage in Tunisia and possibly assets in Libya.

The company added that the assets would be sold as packages to attract maximum interest and more than 40 companies had already expressed their interest.

About 20-24 companies would be selected for data room access.

Oil Search has appointed Harrison Lovegrove & Associates as its advisor for the divestment and expects to send out invitation letters to interested companies by the end of March.

The sales are expected to be effective from the middle of 2008 with estimated completion in the early fourth quarter.

Meanwhile, the company said that despite the tightening global credit markets, there was sufficient capacity to meet the PNG LNG project's total debt requirement of about $9.9 billion, of which its share is about $2.9 billion

Most of these funds are likely to come from export credit agreement loans, bank debt and debt capital markets.

Oil Search added it plans to maintain its oil production at around 40,000-50,000 barrels per day until 2011 to provide the cash flow it needs to help finance development of the liquefied natural gas project.

The company also spelled out its plan to build on the PNG LNG project, which it described as its first phase of growth from gas, with additional LNG trains or plans, petrochemicals supply, fertilisers and domestic gas opportunities in Papua New Guinea.

TOPICS:

A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.

A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.

editions

ENB Cost Report 2023

ENB’s latest Cost Report findings provide optimism as investments in oil and gas, as well as new energy rise.

editions

ENB Future of Energy Report 2023

ENB’s inaugural Future of Energy Report details the industry outlook on the medium-to-long-term future for the sector in the Asia Pacific region.

editions

ENB Cost Report 2021

This industry-wide report aims to understand current cost levels across the energy industry

editions

ENB Social Licence Report 2021

In its second year, this research now includes trends and new findings surrounding impacts and responses as the energy industry seeks to secure and maintain a social licence to operate.