NPCP aims to develop national oil, gas industry in PNG

The National Petroleum Company of PNG (NPCP) is poised to become a fully fledged national oil and gas company in Papua New Guinea.

The prospect is boosted by its first ever commercial transaction acquiring four major assets from Australian firm CUE Energy at more than K18 million (US$7 million).

NPCP managing director Wapu Sonk in a press conference yesterday envisioned that the acquisition of CUE’s strategic assets; "is in line with the NPCP focus on developing the opportunities within the hydrocarbon sector in the near term" in PNG.

The acquisition of interests adds to NPCP’s growing asset base in the PNG hydrocarbon sector. The acquired assets from CUE are: PDL 3 – South East Gobe 5.568892%; South East Gobe Unit 3.285646%; PRL 9 – Barikewa 14.894% and PRL 14 – Cobra, Iehi & Bilip 10.94%

"This increase in the NPCP portfolio was achieved through the acquisition of Cue PNG Oil Company Pty Ltd (Cue PNG), a subsidiary of Australian Stock Exchange listed E&P entity, Cue Energy Resources Limited (Cue Energy) effective on November 20, 2014, for a cash consideration of US$7 million," Mr Sonk told reporters yesterday.

"This is NPCP’s first major commercial transaction outside of its PNG LNG project related transactions. "The acquired portfolio has an oil producing licence (PDL 3 – South East Gobe) and two retention licences that contain at least 700 – 800 BCF of gas.

"These assets are very close to existing facilities and also within the PNG LNG Project pipeline route, especially the tie in point at Kopi. "The fair market value of the portfolio is significant and NPCP is confident of realising this substantial value in the near term.

"There are several options available to monetise the gas for power generation, export and petrochemical activities," he added. The founding managing director further explained; "the purchase fits our strategic plan. This purchase strengthens our balance sheet and grows the company.

"It represents an exciting chapter for NPCP as the company expands its operations upstream beyond the successful delivery of the PNGLNG Project.

"Several of NPCP’s key strategies will be achieved with this acquisition and our shareholder the State, and our important stakeholders the people of Papua New Guinea, will realise value from this acquisition and the company’s overall growth in the near term," he stressed.

NPCP is the State’s nominee in the ExxonMobil operated PNGLNG Project in accordance with the Oil & Gas Act 1998. NPCP has a 16.57% participating interest, the 3rd largest, in this multi-field, multi-party, integrated venture having a development cost of over US$19 billion or about K50 billion that includes a gas conditioning plant upstream in Hides, a combined 700 kilometres of on-shore and offshore pipeline and a two train LNG plant near Port Moresby.

The Project has a nameplate of 6.9 MTPA producing 9 TCF of gas over 20 years. NPCP’s participating interest is determined by the amount of gas committed to the Project from a defined area within its four underlying petroleum development licences (PDL).

NPCP has a 20.5% interest in each of these licences which are: PDL 1 – Hides; PDL 7 – Hides; PDL 8 – Angore; and PDL 9 – Juha. The four underlying PDLs run their own separate wok programs on non Project defined areas within the PDLs.

NPCP, under the existing joint venture arrangements, supports the operator of each PDL to carry out further exploration and evaluation activities to commercialise non Project gas. Any incremental gas proven may underpin a third train development as expansion to current PNG LNG Project.

Through its co-ownership in PDL 1, NPCP together with the PDL 1 partners, jointly sell gas to the Oil Search owned Hides gas-to-electricity plant which supplies power to Porgera gold mine. The transaction is subject to final Government approvals.

 PNG Today/ Post Courier