The large range of potentially high-returning, gas exploration opportunities in Oil Search’s existing portfolio in PNG mitigates the immediate need to expand internationally.
However, given PNG is primarily a gas province and the long lead times associated with LNG development, the Company is also seeking to build, in a measured way, a high-value, oil-focused exploration portfolio of material international opportunities, where Oil Search can leverage relationships developed over a decade operating in the Middle East and North African region.
The pace of international exploration will depend on the timing and priority of capital commitments in PNG.
Oil Search has a 60% interest in, and is operator of, the Taza Production Sharing Contract (PSC) in the Kurdistan Region of Iraq. Taza is a 511 square kilometre block located in the south-east of Kurdistan, in a prolific petroleum province, adjacent to the Pulkhana block and the Kor Mor block, both of which contain large oil and gas discoveries.
Following the discovery of oil by the Taza 1 exploration well in 2013, two appraisal wells (Taza 2 and Taza 3) were drilled, to better define the size of the Taza structure, potential oil volumes, quality of the reservoirs and their production flow potential. Both appraisal wells flowed low rates of oil and water on test. In addition, 630 square kilometres of 3D seismic over the block was acquired.
Analysis of the 3D seismic has indicated that both appraisal wells were drilled in areas where natural fractures are only lightly developed. During 2016, further work to integrate the well and seismic results will be undertaken, as well as a detailed economic analysis and an ongoing assessment of the security situation.
Taza PSC participants(1)
1 Oil Search’s funding interest is 75%, with the KRG’s 20% interest carried by Oil Search and Total.