The National newspaper quoted Oil Search asset manager Phil Caldwell as saying the company was aware of the allegations made by the landowner group and had been openly discussing these issues and sharing data with the landowners and the Department of Environment and Conservation since August this year.

He added the company had investigated the claims and had been unable to substantiate them through an in-house and independent testing of water samples from the relevant creeks.

"Test results from water samples collected before, during and after drilling ceased had found no significant traces of drilling mud chemicals against background levels and all measurements were within PNG and World Health Organisation raw water guidelines," Caldwell said.

He noted that impacts on drinking water in Lake Kutubu as described by the landowners were not uncommon in the area due to seasonal variations in rainfall and runoff.

Representatives of people living near the Yakerabo and Gese creeks close to Lake Kutubu had last week threatened to shut off road access to Oil Search's operations unless the company responded to their claims within 14 days.

They added that Oil Search had to address the issue or pay them compensation of 20 million kina ($US7.35 million) for damage to their water.