OilSearch Limited is PNG’s longest-established resources company, with an 80-year history of operations in the country. It currently operates all of PNG’s producing oil and gas fields and also has operations in Australia, Yemen and the United Arab Emirates.

In fact, the company is still making history, announcing a record US$240 million post-tax profit for the 2008 financial year—a 70% increase on 2007.

While this result relied strongly on an oil price that has since fallen sharply, it has put the company in a strong position to pursue an involvement in the massive US$11 billion PNG LNG gas project (it currently has a 34% stake).

‘We have a strong balance sheet and a US$400 million line of credit in place,’ states OilSearch’s Managing Director, Peter Botten, who has been at the helm of PNG’s largest oil and gas producer since 1994 and has seen his company deliver top-quartile performances in each of the past five years.

Botten sees the development of liquefied natural gas as a natural next step from the development of PNG’s oil reserves, in which OilSearch has been a leader since Chevron Texaco’s departure from PNG in 2003. The PNG LNG project is a massive opportunity for OilSearch: ‘The project represents the equivalent of 600 million barrels. Very few companies of our size get to treble their production in this way. The size of the prize means that the attention it is getting is well warranted. The key thing now is to maintain momentum.’

Botten is convinced the project can deliver major benefits to PNG if handled correctly: ‘PNG will undergo a significant metamorphosis. There’s now a lot of focus on the Government using the benefits long-term for the people. We’d encourage them to analyse what other governments have done around the world.’

First published in Business Advantage Papua New Guinea 2009/10