Oil Search said SE Mananda, located in the Southern Highlands Province, is currently flowing from one well but expects to tie-in a further three wells to the gathering system to reach the 7000bopd target.

Managing director Peter Botten said development of SE Mananda, Oil Search's first operation oil development, had presented numerous 'technical and commercial' challenges to the company since it was first discovered in 1991.

Botten said this, in conjunction with weather conditions, had led to lengthy construction delays, design changes and a subsequent increase in budget for SE Mananda.

"This [the weather], together with a number of design changes and technical issues arising from the challenges of drilling in this geologically complex and remote area of PNG, resulted in an increase in budget with the final development cost estimated to be around $US145 million," he said.

The company has constructed 16km of parallel oil and gas-lift flow lines to link the four wells into the existing Apogo processing facility, which was required to be expanded for the development of SE Mananda.

A 470m cable suspension bridge was also constructed to carry the four pipelines, (oil production, gas injection, and two chemical pipelines) across the 400m deep Hegigio Gorge.

However, Botten praised the PNG Government and the level of cooperation with the three landowner groups.

"The agreement with the PNG Government on fiscal incentives for the project and the signing of a benefits-sharing agreement between the three affected landowner groups, were highly instrumental in ensuring the development could go ahead," he said.

"The SE Mananda Project has provided Oil Search with invaluable development experience opportunity, which will be applied to future oil and gas projects. It is a good illustration of our willingness to create value through innovative developments and close cooperation with the PNG Government and the community."

Participants in SE Mananda are Oil Search (72.27%), AGL Gas Developments (11.9%), Merlin Petroleum (7.93%) and Petroleum Resources Kutubu (7.9%).