Oil Search mulls joint ventures for Papua New Guinea LNG project

 From AAP

OIL Search today said its massive drilling activities in the Gulf of Papua were drawing strong interest from major energy companies seeking to be a part of the project.

One of Australia's largest oil and gas companies, Oil Search said it will spend more than $US2.2 billion ($2.05bn) in 2012 on the largest drilling program in its history, the $15.7bn PNG LNG development.

Oil Search is a joint-venture partner in the project with Exxon Mobil.

Construction for the project would be well advanced by the end of 2012, and offshore drilling was scheduled to begin by December, Oil Search managing director Peter Botten said in the company's annual report, released today.

Peter Botten

As Oil Search does not have experience in operating highly complex LNG facilities, farm-in discussions are under way with a number of selected potential partners, all with world class LNG expertise," he said.

"The company has received strong interest from companies wishing to consider this opportunity."

Mr Botten indicated in February that Talisman and Shell were prospective partners in the LNG project.

The level of resources around the PNG LNG fields should be known after the first phase of drilling by early 2013, he said in the report.

Mr Botten received $US4.4 million in remuneration for the 2011 calendar year, down from $US5.04m in the previous year, the annual report showed.

Oil Search said profit rose 9 per cent to $196.2m in 2011, on an annual comparison.

Shares in Oil Search this afternoon rose 1.16 per cent at $7, as the benchmark S&P/ASX 200 index was down 0.3 per cent