First Well Spudded in Santos Infill Drilling Campaign at Papua New Guinea Oil Field

en.Wedoany.com Reported - On October 22, Australian energy company Santos confirmed in its 2026 third-quarter operational report that the first well has been spudded in its infill drilling project at an oil field in Papua New Guinea, with the landmark drilling operation commencing after the end of the third quarter on September 30. The project has been approved by Papua New Guinea's national petroleum regulatory authority, and the supporting drilling rig was reactivated during the third quarter. According to the development plan previously announced by the company, this infill drilling campaign is intended to increase crude oil production using existing oil field infrastructure, with plans to drill 4 infill wells in 2027.

Santos made a final investment decision on the infill drilling project in the first half of 2026. The project primarily involves supplementary drilling at existing oil fields, with new crude oil production received through already-built production and processing facilities, reducing the need for new surface production facilities. According to the company's investor materials released in May, the project targets an internal rate of return of 31%, with an expected payback period of 3.8 years, and arrangements have been made to share certain costs with the PNG LNG project. The above economic indicators are investment estimates from the project development stage.

This round of infill wells is also linked to subsequent development arrangements involving the Agogo production facility tie-in project. Santos plans to convert some of the infill oil wells to natural gas production wells after the Agogo production facility tie-in project is commissioned. The tie-in project received final investment approval in May 2026, with construction commencing in the third quarter, and the main design and construction contracts have been awarded. The infill drilling project and the gas facility tie-in project are implemented separately, with oil and gas development subsequently integrated through the existing production system.