BP Sells Papua New Guinea Assets for $400 Million

abarrelfullabarrelfull wrote on 07 Aug 2012 13:28

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28 April 1998

BP has agreed in principle to sell its exploration and production interests in Papua New Guinea (PNG) to Oil Search for $400 million.

The deal, which is subject to the approval of the PNG authorities, was signed in Port Moresby, Papua New Guinea today and is due for completion in the third quarter of the year.

The assets principally comprise interests in four onshore licence areas which currently yield net BP production of 13,000 barrels a day from the Kutubu and Moran oilfields and 15 million cubic feet of gas a day from the Hides gas field.

BP's share of oil reserves is approximately 35 million barrels. Its share of gas reserves, largely undeveloped, is some three trillion cubic feet.

A number of options are being considered to develop the gas reserves, including an LNG export scheme targeted at Far East markets and an export pipeline to the Australian mainland.

The interests being sold are:

A 45 per cent stake in licence PPL138 which contain parts of the Moran oil and Hides gas fields

A 45 per cent stake in PDL1 which contains the Hides gas field

A 95 per cent stake in the Hides gas project which supplies 15 million cubic feet of gas a day to generate electricity for the nearby Porgera gold mine

A 19.375 per cent stake in PDL2 which contains the Kutubu oil field which produces 55000 barrels a day (BP share, 11000 barrels a day) and a 19.375 per cent interest in PL2 containing the Kutubu oil export pipeline.

The sale to Oil Search excludes BP's downstream operations — which have a 23 per cent share of PNG's retail and commercial market — and its Solar business.

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