Papua New Guinea:
In block PPL152 the Bigfoot structure is very exciting, earlier this year Adolf Lundin said he believes they have significant oil reserves there, not only gas. I hope they are planning to start drilling in 1998, but it has not been confirmed yet.
The Pandora gas project looks more and more promising, it will add a lot of fuel for the fire later this year. In one way the situation is similar to that of Arakis, they have huge gas/oil reserves, but they have to build a long and very expensive pipeline, that is a MUST. The market is sceptical, they don't believe it until they see the pipeline plans realized.
Chevron is the pipeline project manager, and a number of consortiums are tendering to build, operate and become part owners of the pipeline with the cut off date for bids being June 16. Chevron hope to have a front runner from the bids by the end of July and announce that a pipeline company has joined the consortium by October 1.
A 600 megawatt gas-fired power station in Townsville, and Australian aluminium group Comalco's alumina refinery project in Gladstone, would provide enough demand to help the pipeline cross the economic threshold. All 3 projects appear to be largely dependent upon each other for a development decision in the short term.
When Chevron/IPC can get completion on their deal, then there is a huge potential in future profits. The project would deliver an estimated $30 billion worth of revenue over its full life, and offer vast opportunities to Australian companies.
IPC's 800 bcf of gas is worth around US$7 per share. But they have only drilled 2 wells yet, according to Ian Lundin they will probably find at least twice that amount if they drill 2 more wells. But it's no idea to start drilling before Chevron has finally decided to build the pipeline.
Your Man in Sweden |
