08-20-2013, 11:49 PM
Also from the OSH disclosures to their June 30 financials:
"ExxonMobil has advised that, should the acquisition proceed, its intention is to establish an additional LNG train at the PNG LNG plant site. Should this gas be brought into the PNG LNG Project, it is likely that Oil Search will have an opportunity to participate in that expansion. The Company believes that being an owner of core gas and liquids infrastructure in PNG will add value to its business as new developments take place."
So Exxon has obviously been in discussions with its PNG LNG partners on its intentions and a likely progression would be to (hopefully) close the deal with IOC as far as securing the 4.6Ts, begin further drilling, get the PDL taken care of, get pipeline(s) going to the coast, etc. Botten's statements in the CC may reflect his thoughts, but if Exxon and IOC conclude talks successfully they will not want to wait on discussions with partners, nor will the PNG government want them to. You don't do projects like this with last minute decisions and agreements. Exxon is showing the need to be proactive in securing gas for a future PNG LNG train NOW because so far OSH has been unable to do so. Somewhat buried in the disclosures amongst the fluff on their Gulf drilling where they had earlier stated that there was a "54 metre thick sand package with good reservoir properties at the main Pliocene target level" is this:
"A 5-10 metre gas column was found".
This is at the Flinders 1 well. The Hagana 1 well has:
"encountered a 35 metre thick turbidite sand package of good reservoir quality at the main Pleistocene target level. Unfortunately the sandstone was water-bearing at this location, with only low gas saturations. Further work is underway to evaluate the volumetrics of the discovery prior to plugging and abandoning the well."
They are now drilling the "last" Gulf offshore well:
"As a result of the encouraging results in the Gulf of Papua campaign to date, Oil Search has decided to take up the option to drill a third well in the offshore campaign, at Kidukidu in PPL 385 (Oil Search – 100%, operator), which will spud following the completion of Hagana 1."
So we can see that Botten is more than posturing to make things look better than they are in their exploration activities. Likewise he is likely posturing a bit with any PNG LNG expansion. As operator Exxon has the duty and responsibility to maximize the project and they don't tend to wait, especially when there is 4.6Ts sitting in their front yard relatively close to their underutilized undersea pipeline. The truth is somewhere in between.
"ExxonMobil has advised that, should the acquisition proceed, its intention is to establish an additional LNG train at the PNG LNG plant site. Should this gas be brought into the PNG LNG Project, it is likely that Oil Search will have an opportunity to participate in that expansion. The Company believes that being an owner of core gas and liquids infrastructure in PNG will add value to its business as new developments take place."
So Exxon has obviously been in discussions with its PNG LNG partners on its intentions and a likely progression would be to (hopefully) close the deal with IOC as far as securing the 4.6Ts, begin further drilling, get the PDL taken care of, get pipeline(s) going to the coast, etc. Botten's statements in the CC may reflect his thoughts, but if Exxon and IOC conclude talks successfully they will not want to wait on discussions with partners, nor will the PNG government want them to. You don't do projects like this with last minute decisions and agreements. Exxon is showing the need to be proactive in securing gas for a future PNG LNG train NOW because so far OSH has been unable to do so. Somewhat buried in the disclosures amongst the fluff on their Gulf drilling where they had earlier stated that there was a "54 metre thick sand package with good reservoir properties at the main Pliocene target level" is this:
"A 5-10 metre gas column was found".
This is at the Flinders 1 well. The Hagana 1 well has:
"encountered a 35 metre thick turbidite sand package of good reservoir quality at the main Pleistocene target level. Unfortunately the sandstone was water-bearing at this location, with only low gas saturations. Further work is underway to evaluate the volumetrics of the discovery prior to plugging and abandoning the well."
They are now drilling the "last" Gulf offshore well:
"As a result of the encouraging results in the Gulf of Papua campaign to date, Oil Search has decided to take up the option to drill a third well in the offshore campaign, at Kidukidu in PPL 385 (Oil Search – 100%, operator), which will spud following the completion of Hagana 1."
So we can see that Botten is more than posturing to make things look better than they are in their exploration activities. Likewise he is likely posturing a bit with any PNG LNG expansion. As operator Exxon has the duty and responsibility to maximize the project and they don't tend to wait, especially when there is 4.6Ts sitting in their front yard relatively close to their underutilized undersea pipeline. The truth is somewhere in between.
