Keiran Wulff has had a bruising first year as managing director of Oil Search, Papua New Guinea’s celebrated oil and gas company.

Having survived the hardships of 2020, however, he believes the company is poised for growth in the decade ahead.

Oil Search currently produces around 28.5 million barrels of oil equivalent per year, predominantly gas, but later this decade expects production to nearly double to 50 million boe.

Free cash flow, which is currently between US$100 million and US$130 million per annum today, is expected to leap to US$1.5 billion by the end of this decade.

All of this will stem from oil and gas within its existing portfolio in PNG and Alaska.

The strategy, as Wulff unveiled last month, is focused on developing Oil Search’s “phenomenal” best estimate discovered resources, starting with the giant Pikka oil development in Alaska followed by the Papua LNG project in PNG.

“We’ve only produced 25% of our (best estimate contingent) resources so we don’t need to explore for more," he says. "The strategy is to commercialise what we have.”

Resources

Oil Search’s best estimate contingent resources in PNG are 1.3 billion boe, and in Alaska, 494 million barrels of oil.

Its exploration portfolio in PNG has been trimmed, with frontier acreage relinquished in the Northwest Foldbelt and deep-water Gulf of Papua, as well as marginal remote discoveries.

The Eastern Foldbelt around the large Elk-Antelope field has been retained, but no exploration is planned for two years at least, says Wulff, a geologist by training with undergraduate and postgraduate qualifications from Curtin University in Perth and a 21-year career at Oil Search behind him.

Political upheaval has put a halt to exploration in PNG and delayed development, but Wulff is positive about the country’s future, and says resource development is fully supported by the current government and the political opposition.

“There’s a lot of discussion happening at present and all the parties are close to deciding how to move forward. It only takes a couple of major projects to make a massive difference for PNG, so it has that potential,” Wulff tells Upstream.

Prime Minister James Marape has made inflammatory comments about Oil Search but Wulff brushes this off as “the rough and tumble of PNG politics”.

The company, he maintains, has “a great reputation and everyone knows what we have done and how committed we are to PNG. We’ve been there for 91 years and we’ll be here a lot longer yet”.

In Alaska, Oil Search has nearly doubled its bet estimate gross resource size to 968 million barrels since it acquired its position in early 2018.

There is now a clear line of sight with joint venture partner Repsol to a phased development of the Pikka oilfield, with production starting in 2025 and building to 80,000 barrels per day of oil, followed by additional phases.

From the equatorial heat and jungle of PNG to the frozen lands of Alaska, the operating environments could not be more different, but there is one commonality: indigenous communities, an area that Oil Search specialises in from its years of deep engagement with local communities in PNG.

Wulff pays tribute to his predecessor Peter Botten’s achievements during his 25-year reign.

“I’d say Peter and I both have a passion for community and our staff — we appreciate the value of good partnerships.”

Taking over in February, just as the pandemic was taking hold, was a “baptism of fire”, he says.

“This year, I’ve had an absolute focus on capital management and prioritisation. My history and knowledge of Oil Search’s operating assets has been useful in managing our way through the challenges.

“We’ve come through a difficult year, very humbling, a lot of introspection, and a lot of time spent setting up the company for the future.”

Tough tasks

He’s proud to say the company has had no Covid cases at its operated PNG oilfields.

“We’re very experienced in dealing with infectious diseases in PNG, so we identified early the impact of Covid could be severe. We quickly established quarantine, or cocoon zones, in our operations, and our staff have been heroic. Many have been away from families for months, but we’ve cut that back with better testing protocols,” he says.

One of Wulff’s toughest tasks this year was reducing the size of the workforce in Alaska, Sydney and PNG as he sought to lower Oil Search’s cost base.

“We had to let a lot of good people go in PNG,” he says. “It was the hardest thing I’ve had to do this year.”

Wulff hopes once project activity resumes in PNG there will be an opportunity to re-hire some of those highly skilled people.

Sustainability — reducing carbon emissions, respecting the environment and continuing to partner with communities — is important to Oil Search.

“The energy transition is here, but the reality is the oil and gas industry has a lot of life left, and we are well placed to be involved,” says Wulff, who finds peace and relaxation in long-distance swimming and spending time with his wife and two children.

With a bruising year of changes coming to a close, Wulff is excited about the future as he believes the company is now positioned for long-term success.

Field Development

'A baptism of fire': Wulff has Oil Search poised for growth after bruising first year at the helm