The result was up 49% on the September quarter and 146% higher than in the corresponding period in 2001.

Earnings were boosted by a 17% increase in oil and gas production in the December quarter as well as higher gold production following plant disruptions. Strong prices for both gold and oil also had a positive impact on the bottom line.

As for the $7 billion PNG Gas pipeline project, Oil Search said project sponsors are in "advanced negotiations" with customers in Northern Australia and Queensland to secure sufficient customers for the project to proceed with front-end engineering and design.

Looking to increase its focus on oil and gas exploration, Oil Search this week agreed to sell its 31.4% interest in the Ramu nickel project to the PNG government-owned Mineral Resources Development Co.