Page 7 - Oil&Gas-AustralAsia-2015-Issue-4
P. 7

Last month Papua New Guinea’s gov- with Oil Search’s strong exploration Executive Peter Coleman may be able
ernment said it now expected its budget portfolio. to use his previous 27 years’ experience
deficit to be equivalent to 9.4 per cent of Woodside who is aiming for an output at ExxonMobil in PNG as an executive
GDP in the current fiscal year, up from of 94 million barrels of oil equivalent when the PNG LNG project was in its
its previous estimate of a deficit equiva- is a much larger operator. The com- infancy to help negotiate the purchase.
lent to 4.4 per cent of GDP. pany reported a net profit after tax of Analysts surmise the fall in oil and
Oil Search currently holds an estab- US$2.421 billion for 2014 and the addi- gas prices may now cause a spate of
lished position in PNG operating there tion of Oil Search to Woodside would mergers, as companies with high op-
since 1929 and holds a 60 per cent in- add considerable value to the 50 year erating costs and heavy debts become
terest in all its operated and producing veteran of the Australasian petroleum desperate. In Australia alone more than
oil fields. The company is also pursuing industry. US$200 billion has been invested in
two major LNG growth opportunities The company’s Australian operations mega LNG projects in recent years, cre-
including potential expansion of the include the North West Shelf project ating an oversupply of gas. Added issues
PNG LNG and Papua LNG Projects offshore Western Australia, the Pluto with current low pricing trends are see-
that are rated among most competitive LNG Project, also on the west coast and ing many projects become uneconomic
LNG projects globally. the Australian Oil portfolio of FPSO in the short term. Majors such as Santos
According to analysts Wood-McKenzie produced oil in the far north-west of and Origin are inviting deals on assets
producing gas in PNG when calculated Australia. in a bid to divest.
on a LNG project break-even compari- However deal making for Woodside Neil Beveridge, an analyst at Bernstein
son is competitive with Australian LNG has been a challenge, the company Research said rival bids could start
projects in terms of production. has frequently delayed its investment flowing from other major oil compa-
The company holds material positions decision on the massive Browse LNG nies, including Exxon Mobil. Meaning
in PNG’s North West Hub, incorporat- project off Australia’s coast and last year Woodside may have to increase its bid
ing the P’nyang field and the Gulf Hub abandoned a planned US$2.5 billion to secure a deal.
including the Elk-Antelope fields that investment purchase in the Leviathan Major Chinese oil companies have
are likely sources of gas for next phase natural-gas discovery off Israel’s coast. shunned overseas investment in the
of development for local major LNG It has been suggested by the analysts short term making deal-making from
projects. Multiple exploration oppor- in the Wall St Journal Woodside Chief the region unlikely.§
tunities also exist to supply further gas


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