Papua New Guinea makes progress on country’s first offshore oil and gas development

(WO) – Mineral Resources Development Company Limited (“MRDC”) and Twinza Oil Limited (“Twinza”) have obtained all internal approvals and executed a series of binding agreements for MRDC to take an up to 50% Participating Interest in the Pasca A Development Project. Additionally, the companies agreed to cooperate in the acquisition and development of other oil and gas assets in Papua New Guinea.

The agreements, including a Joint Operating Agreement, will become fully effective upon, among other conditions, receipt of PNG Independent Consumer & Competition Commission (“ICCC”) approval and the execution of a satisfactory Gas Agreement for the Pasca-A Project. MRDC may purchase up to a 50% Participating Interest in Twinza’s Pasca-A Assets, with Twinza remaining the Pasca-A Project Operator.

Background. The Pasca A Development Project is a large FEED-ready offshore project in the Gulf of Papua. Twinza, 100% owner of the project, applied for the Petroleum Development Licence (PDL) in June 2015, has complied with all Government requests and has been steadily advancing the project while negotiating the Gas Agreement since 2020.

The Pasca A field is fully appraised, with four wells having been drilled in the field, resources independently assessed by Gaffney, Cline & Associates, pre-FEED studies completed, and the project will enter FEED following the approval of the Pasca Gas Agreement.

Twinza has invested over K400 million in the project in anticipation of permitting and fiscal certainty. In 2023, the company announced a 35% increase in total resource size (almost doubling the benefits of the project to the State) and validated Carbon Dioxide sequestration potential of 200 million tonnes of CO2, making it potentially the first carbon negative hydrocarbon project in PNG.

The project is expected to contribute over K30 Billion to Papua New Guinea’s economy and K15 Billion revenue to the country over the life of the Project.

Commenting on the announcement, Twinza Executive Chairman Stephen Quantrill said, “I am very pleased to be able to announce execution of these Agreements to work and collaborate with MRDC in the development of oil and gas assets in PNG, starting with our fully appraised, ready-to-go Pasca A project in the Gulf of Papua.

We thank Prime Minster Marape and the government of PNG for their support and look forward to working with Augustine Mano, John Tuaim and their team at MRDC for the future success of the Pasca A Project and towards the development of other oil and gas assets in Papua New Guinea.

Pasca A, when operational, is expected to generate more than K500 million per year to the PNG State, generate around 500 permanent jobs and bring significant US Dollars of foreign currency into the PNG economy. Twinza stands ready to proceed with Pasca Phase 1 FEED as soon as the Pasca Gas Agreement is executed and the Project Development License is awarded.”