fy06 net profit 457m final div 36.5c , page-2

Oil Search responds to AGL comments on PNG gas pipeline
12:23, Wednesday, 16 August 2006

Sydney - Wednesday - August 16: (RWE Aust Business News) -
Following comment by Australian Gas Light Co (ASX:AGL) on the status of
the PNG pipeline project, Oil Search (ASX:OSH) said constructive
discussions have been held between APC (AGL and Petronas) and
stakeholders regarding the various solutions to long-term ownership.
It said, key to delivery of a revised pipeline ownership
structure has been confirmation of final customer loadsm especially at
Moomba, that will allow the final pipeline configuration and capital
costs to be confirmed.
"It is clear to all parties that this remains the key issue in
moving this project forward to a potentially successful outcome," it
said.
"The release by AGL is clearly an attempt to bring key decisions
on project participation and ownership to a rapid outcome.
"The project has made progress on moving indicative gas sales
agreements with all its customers over the past six months.
"Oil Search believes that the Australian portion of the pipeline
and infrastructure is a potentially valuable asset and an attractive
investment for the right investor - one which would attract material
interest, given final confirmation of offtake arrangements.
"Oil Search believes that the PNG oroject remains an economically
attractive projectm and we look forward to early resolution of the
issues raised by AGL in their release."
AGL has previously signalled to the market that it did not see
itself as a long-term owner of the Australian portion of the PNG pipeline
and Oil Search noted in the latest comments that AGL "remains
committed as a strong financial supporter of the PNG Gas project
and continues to see PNG gas playing an important and strategic
role in the supply of energy to eastern Australia".
"It should be remembered that the PNG pipeline has already had a
material impact on gas prices in eastern and southern Australia," Oil
Search said.
"It remains an economically attractive investment subject to load
confirmation
"Without this competition provided by this project, energy costs
will rise materially in the short term affecting many customers in these
markets, at a time when petrol prices are impacting the economy."
Oil Search shares were down 38c to $3.34.