The rebirth of Papua New Guinea

Abstract

Gas was first discovered by drilling activity in Papua New Guinea in 1956. Nevertheless it was almost 60 years later when the Exxon-operated PNG LNG Project became the first large-scale commercialisation of the country’s prolific gas resources, with export of the first LNG shipment in May 2014. The proven fluvial-deltaic Late Jurassic, early Cretaceous and Tertiary carbonate reservoirs are prolific petroleum producers. When combined with the high-quality liquid-rich nature of the gas and the onshore location, this has resulted in PNG’s LNG projects being some of the lowest cost and most profitable LNG projects globally. The success of the PNG LNG Project along with the substantial identified existing and yet-to-find gas resources has resulted in a recent resurgence of exploration interest in PNG as companies look to expand and capitalise on the country’s developing position as a globally significant LNG supplier. In 2015 Oil Search undertook a whole of country review using its extensive database and in-country knowledge. This study incorporated all well, seismic, surface, remote sensing, production and development data, and has resulted in a detailed understanding of the play distribution and risk ranking, and importantly delineated a number of potentially material new play types in the country. Approximately 4.8 billion barrels of oil equivalent recoverable resources (2P and 2C) have been discovered in PNG to date, of which approximately 85% is gas. The countrywide regional study and common risk segment analysis by Oil Search (2015) established that PNG potentially contains an additional seven billion barrels of oil equivalent resource still to be discovered. The majority of this volume is expected to be gas, estimated to be in the order of 40 trillion cubic feet and 550 million barrels of undiscovered prospective resources. Oil Search has been active in all of PNG’s known petroleum basins since 1929 and built a substantial database. Pool-size distributions and a countrywide prospects and leads inventory suggest discovery of new giant fields is likely and of sufficient scale to support future LNG projects. Six sub-basins contain proven petroleum plays that are predicted to extend into under-explored areas. These areas represent the future petroleum exploration frontier in PNG.