South Pacific: Papua New Guinea

SOUTH PACIFIC

Papua New Guinea

Large structures such as Moran, Hides, Hedenia, Kutubu and Gobe have given the country one of the world’s highest exploration success rates, especially in the Papuan Fold belt. PNG hosts no formal licensing rounds; contracts are arranged on a bilateral basis with the government. Virtually all activity is onshore.

For licensing in 1999, limited activity saw Orogen Minerals acquire all of BHP Petroleum’s interests in PNG: including PPLs 2 and 4 (Kutubu / Gobe fields), PPL 161, and APRLs 2 (Juha prospect) and 3 (P’nyang gas prospect). AWE completed a takeover of Omega Oil, affecting interests in PPLs 157, 191 and 204. In 1st-quarter 2000, there was a restructuring of Indo-Pacific / Trans-Orient’s assets on two Santos and two Indo-Pacific licenses. ARCO relinquished PPLs 182 and 207 in Papuan basin; and Gedd gave up PPL 143 in the same region. In mid-year, new awards were announced in Papuan basin – PPL 218 to Oil Search / Woodside, 50/50; and PPL 219 (formerly 161) was given to the same five-company group headed by Chevron. And Chevron Niugini acquired 40% in PPL 206 south of Kutubu field.

Wood Mackenzie highlighted two exploration wells in 1999 in NE central and S central areas, respectively – Santos’ Tumuli 1 dry wildcat in PPL 213, and Chevron’s NW Gobe 1X wildcat, with oil shows, in PPL 161. The Department of Petroleum and Energy says 17 onshore wells were drilled last year, with four dusters; it expects six wells this year, including two offshore. In addition to 88,000 bpd oil / condensate production last year, 320 MMcfd gas was reported.

WM’s December 1999 report on South Pacific area developments speculates that five fields will see development from 2001 to 2004, including: Kutubu, Gobe Main, SE Gobe and Moran oil and Moran gas – all operated by Chevron and all onshore. WM gives these projects total recoveries of 264 MMbbl liquids and 2.2 Tcf of gas.

The biggest project – also analyzed fully by WM, June 2000 – is the proposed PNG to Queensland gas project. Key to the system is a 2,000-mi-long pipeline to run from Hides / Kutubu / Gobe areas, south across the Gulf of Papua to Bamaga, Queensland, and SE to Gladstone, 290 mi NNW of Brisbane.

Remaining reserves in possible developments in PNG are estimated by WM at 8.9 Tcf – 5.9 Tcf are likely necessary to start the project. An agreement has been reached with Hides field JV partners to dedicate sufficient reserves. A proposed $1.4-billion alumina refinery has been sited at Gladstone. And in May, the Queensland Government released a critical Energy Policy paper to help ensure a role for gas in the state’s energy mix. Thus, the project is likely to proceed, but no schedules have been released.