Oil Search has committed to spend approximately $A5.9 million over the next two years on evaluation of existing data as well as the drilling and sampling of three shallow wells.
The agreement between the PNG Government and Oil Search includes an option to extend the licences for an additional two years subject to relinquishments and an additional committed work program.
Existing well data suggests the presence of thick coal layers and a large coal basin in the area of the licenses. The rank, gas content and producibility of the coals will be constrained by the proposed drilling program which is anticipated to reach a total depth of less than 900 m.
Oil Search Managing Director Peter Botten said “While substantial coal seams have been penetrated by previous petroleum wells in the Foreland area of PNG and estimated net coal thickness compares favourable to existing CSG projects globally, the potential for CSG in PNG has not been fully investigated.
“Any successful discovery of CSG resources in PNG could be integrated with supply from nearby conventional gas fields, thereby reducing the risks for any development,”? he said.
Oil Search is also pursuing LNG project opportunities in PNG, as a joint venture partner in the PNG LNG Project, in which a final investment decision (FID) is expected in the 2009 December quarter.