Oil Search Strikes Gas for 2nd Time in Yemen

Oil Search, an international oil and gas developer in which Abu Dhabi is a major shareholder, has struck gas for a second time in Yemen, suggesting the company could soon develop its first gas project outside its home country of Papua New Guinea. Oil Search, which is 17.6% owned by the Abu Dhabi Government-owned International Petroleum Investment Company (IPIC), said the Al Meashar-1 exploration well – in which it holds a 34% interest – had found “high levels of gas”. Flow testing would be conducted once the well had reached its total planned depth, the company added.

In November 2009, Oil Search announced that the Tubb’a-1 well in Yemen – in which it holds a 60% interest – produced up to 9Mscf/d of gas during tests.  It is too early to tell whether the discoveries will lead to a commercial project, but two successive gas strikes are encouraging. The Yemeni exploration concessions held by Oil Search are adjacent to a block containing the Habban oilfield, which may contain more than 100 million barrels of crude. That field is being developed by the Austrian petroleum group OMV, which is 20% owned by IPIC. Oil Search is much smaller than OMV and the even larger oil and gas companies that Yemen’s government has long courted in the hope of reversing years of declining oil output and developing new gas production.  Last year, it produced less than 21,000 bpd of oil and just 15 Mscf/d of gas, all from Papua New Guinea, where it has booked significant reserves and is a partner with ExxonMobil in a US$15 billion LNG project.- The National