SIGNIFICANT technical work has been done on the Papua New Guinea based petroleum projects operated by the China National Offshore Oil Company (CNOOC), a partner in the projects says.
UMC Energy holds a 30 per cent interest in two onshore licences, PPL 378 and PPL 405, and offshore licences, PPL 374 and PPL 375, after farming out a 70% stake to CNOOC in 2012.
In its final results for the 2014 calendar year, released in May, UMC said CNOOC was assessing its options for the offshore permit areas following a series of geophysical studies and the acquisition of 3,015 line kilometres of 2D data in January 2014.
“These studies indicate a high risk for both reservoir and trap formation, along with marginal generation and expulsion values.”
“The high costs for drilling in the deeper waters of these permits requires robust economic thresholds to be met to justify exploration drilling.”
Prospects were looking better for the company’s onshore permits, at which significant technical work was also carried out over the year.
Much of this work had centred on the western and eastern blocks of PPL 378, located in the Central Highlands of the Papua Fold Belt, with significant attention paid to the western block, which contains the Paua 1X oil discovery, drilled by BP in 1996.
CNOOC carried out technical work including reprocessing of the 2D seismic lines across the structure tying into wells on the adjacent Moran oilfield.
“Remapping of the new data indicates the presence of significant structural closure up-dip from Paua 1X to the northeast,” UMC said in an announcement.
The mapping suggested that Paua was a robust structure of a sufficient size and commercial potential to warrant appraisal drilling, the company said.
“CNOOC’s internal experts continue their well planning for Paua 2X, with drilling presently expected to commence in late 2016,” UMC added.
The Paua structure is located on the western block of the PPL 378 permit, which UMC said was situated close to the existing producing and processing facilities of the Moran and Agogo oil and gas fields.
The main gas pipeline connecting Hides to ExxonMobil’s LNG plant at Port Moresby transects the block.
The PNG government has approved a variation to the terms of PPL 405 licence work program, allowing its 2D seismic acquisition and well commitment to be delayed to years three and four – ending on 7 May 2016.
“The initial technical study indicated low potential and high exploration risk across most of the licence,” UMC said.
“Significant potential was identified in some leads within the permit, however these structures are presently defined by single 2D seismic lines and will require additional seismic data acquisition and interpretation in order to elevate the leads to prospect status prior to any consideration for exploration drilling.”
UMC recorded a loss on ordinary activities of US$2.9 million, slightly up on the US$2.5 million loss recorded in 2013.