OIL SEARCH… STEPPING UP TO THE CHALLENGE 15 TH PNG MINING & PETROLEUM INVESTMENT CONFERENCE December 2018 OIL SEARCH LIMITED | ARBN 055 079 868 | ASX: OSH | POMSoX: OSH | US ADR: OISHY www.oilsearch.com
HOW DID WE STEP UP TO THE CHALLENGE FOLLOWING THE EARTHQUAKE? ❖ Relief efforts: first responder role ❖ Operated facilities: managing the road to recovery – Respond – Recover – Operate ❖ Business as usual Without incurring a single recordable incident…. STEPPING UP TO THE CHALLENGE | PAGE 2
EARTHQUAKE REMINDER ❖ 7.5 magnitude earthquake in February 2018. ❖ Last earthquake of similar Moran / Agogo / magnitude more than 100 APF complex years ago. ❖ More than 200 aftershocks – many >4.0 and some >6.0 ❖ Occurred in the Oil Search Gobe / GPF and ExxonMobil area of complex operation. ❖ No fatalities or serious injuries sustained by our employees or contractors Kutubu / CPF complex STEPPING UP TO THE CHALLENGE | PAGE 3
SOCIAL IMPACTS – RIVERS, CROPS AND VILLAGES DAMAGED ❖ Mountain sides collapsed filling rivers ❖ Villages and homes slid off the edge of mountains ❖ Communities significantly affected: – Many deaths and injuries – Destruction of homes, gardens and livelihood – Destruction of social infrastructure including schools, roads, bridges – Loss of basic necessities o Food, water, shelter ❖ Survival was the first priority – Oil Search ‘First Responder’ STEPPING UP TO THE CHALLENGE | PAGE 4
HIGHLANDS EARTHQUAKE – OIL SEARCH AT FOREFRONT OF RELIEF EFFORTS ❖ Oil Search relief efforts: – ‘First Responder’ role (one of few organisations in PNG with ability to provide rapid on-the-ground assistance) – Our Moro logistical base – coordination point for delivery and distribution of aid – Oil Search Foundation (OSF), in partnership with Oil Search and other companies that donated funds, played a leading role in aid delivery to impacted communities ❖ UN estimates that we delivered almost 80 per cent of total food supplies to impacted areas in first four weeks after earthquake STEPPING UP TO THE CHALLENGE | PAGE 5
HIGHLANDS EARTHQUAKE – VISUALISING THE IMPACT ❖ OSH Earthquake Response – Video (PNG Field) ❖ OSH Earthquake Response – Video (Port Moresby) STEPPING UP TO THE CHALLENGE | PAGE 6
DEVASTATION IN PERSPECTIVE – OUR OPERATIONS, PRODUCTION ❖ Short term human impact – loss of basic life support systems (water, power, sewage) ❖ Destruction of, or damage to, accommodation, messing, power, water and sanitation at camps. ❖ Access to Kutubu and Hides lost as Highlands Highway and Southern logistics routes blocked by landslides and bridge damage. Infield roads also blocked. ❖ Agogo Processing Facility (APF) and Refinery damaged. ❖ Limited damage to Central Processing Facility (CPF) and Hides GTE. STEPPING UP TO THE CHALLENGE | PAGE 7
OIL FACILITIES DAMAGE – THIS IS WHAT WE FACED …. Clockwise from top left: ❖ APF HP Compressor cable trays ❖ Refinery Control Room ❖ APF compressor pipework misalignment ❖ Refinery Firewater Pump STEPPING UP TO THE CHALLENGE | PAGE 8
OPERATING FACILITIES – MANAGING THE ROAD TO RECOVERY ❖ Initial response: – Ensure all people and plant were safe – People evacuated to sustainable level Recover Operate Respond – Camp, electricity, water, sanitation unavailable – Supply chain disrupted – A second dedicated team put in place to execute the our ‘First Responder’ social programme ❖ Recovery Phase Export system, Gobe, CPF – New team created reporting to EGM to manage operational recovery phase 26-Feb-18 Mid March End March (export system) – Prioritisation and detailed plan put in place STEPPING UP TO THE CHALLENGE | PAGE 9
ROAD TO RECOVERY – PROGRESSIVE RAMP UP IN PRODUCTION ❖ Immediate priority was to re- GAS SUPPLY TO PNGLNG establish gas supply to PNG LNG Kutubu Gobe Main SEG Unit – Associated Gas (AG) fields supply ~20 per cent of PNG LNG gas – Export system, Gobe, Kutubu brought on-line before HGCP – Worked together with PNG LNG to optimise start-up ❖ Oil production has progressively OIL PRODUCTION increased based on facility rebuild, Hides SEG Unit Gobe Main Kutubu Agogo Moran commissioning: – Gobe fields and Kutubu – Progressive start-up at Agogo and Moran – Moran – since start-up: o Initial flush production o Two plant upsets STEPPING UP TO THE CHALLENGE | PAGE 10
BUSINESS AS USUAL – WE CONTINUE TO CHASE OPPORTUNITIES STEPPING UP TO THE CHALLENGE | PAGE 11
PNG OIL FIELD OPPORTUNITIES ❖ Further to our LNG expansion projects, significant low risk opportunities identified to extend production life of the PNG oil fields ❖ Potential to extend plateau oil production until 2023-24 and M15 M5ST2 add > 30mmbbl net to OSH Moran X ❖ Subject to final technical and commercial review, programme commences with workover and drilling activity at Moran and M7ST1 Kutubu in 2019 M3XST1 Moran X well trajectory STEPPING UP TO THE CHALLENGE | PAGE 12
OIL OPPORTUNITIES – A MIX OF IN-WELLBORE, IN-FIELD AND NEAR-FIELD Development Wells & Work Overs Moran 4, 9 Moran X, O, Q, P Work Overs Wells (2018/19) (2018/19) • • M4 UDT S • • M9 UDT H • IDT 21 IDT 21 Agogo Forelimb Appraisal Moran C Agogo Hedinia Block Forelimb Forelimb UDT S, H (2018 – 2022) (2020 – 2024) (2020 – 2024) • • • Moran X 2 new pads 1-2 new pads • • • Moran O 1-6 producers 1-7 producers • • • Moran Q Huff/puff strategy Huff/puff strategy Hedinia • Moran P Forelimb Increasing Risk STEPPING UP TO THE CHALLENGE | PAGE 13
KEY LEARNINGS FROM 2018 ❖ Splitting the workload (relief efforts, operated facilities, BAU) helped greatly. ❖ Leadership and organisational behaviour: – Staff, contractors, suppliers adjusted to total change in the operating environment – Separated the operations versus development so as not to lose growth focus – Executives and senior management led from the front ❖ Adaptability – People asked to do activities outside of their experiences and knowledge – Clear goals, people stepped up, worked as a team, found solutions to problems, outcomes were beyond expectation ❖ Values and culture – Strength of Oil Search culture shone through – Though things were turned upside down, Oil Search achieved no TRI in its operations. – Can do attitude permeated organisation with amazing achievements STEPPING UP TO THE CHALLENGE | PAGE 14
THANK YOU THANK YOU OIL SEARCH LIMITED | ARBN 055 079 868 | ASX: OSH | POMSoX: OSH | US ADR: OISHY www.oilsearch.com
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