Oil Search Maintains 2012 Production Guidance Despite Aug. Shutdown

Australia-listed Oil Search has maintained its fiscal-2012 production guidance of 6.2 to 6.7 million barrels of oil equivalent, despite a shut-in of its oil fields in Papua New Guinea (PNG) in August which resulted in a 26 percent production decline in 3Q 2012 as compared to 2Q 2012.

In a published statement on its company website, Oil Search's Managing Director Peter Botten gave an account of the oil leak incident which took place at the Kumul Marine Terminal (KMT).

"In late July, during a tanker loading, a minor oil sheen (estimated to be between four and eight liters) was observed on the sea surface adjacent to the KMT. The company took a conservative and responsible approach to this, by immediately suspending loadings and carrying out a comprehensive testing program of the KMT loading system. The full integrity of the oil export system was confirmed, with no source of any leak found. Loadings resumed in late August with no reappearance of the sheen," Botten said in the statement.

Oil Search is PNG's largest oil and gas producer and the company operates all of PNG's producing oil and gas fields. The company holds a 60.05 percent interest in the permits petroleum development licence-2 (PDL-2) and pipeline licence-2 (PL-2).

Oil Search stated on its website that as of Dec. 31, 2011, the onshore PDL-2 permit has remaining recoverable reserves of 27.3 million barrels of 45 degree API light, sweet crude.

The other stakeholders of PDL-2 are: ExxonMobil (14.52%), Merlin Petroleum Company (18.69%) and Petroleum Resources (Kutubu) (6.75%).