Oil and Gas in PNG

PNG has a mature Oil and gas sector that is governed and regulated by the Oil and Gas Act (1998). It is a royalty/tax fiscal system with an additional profits tax. The State has an option to take up to 22.5% equity of developments at the point of Final Investment Decision (FID) when the area covering the defined resource is moved from the exploration Petroleum Prospecting Licence (PPL) to a Petroleum Development Licence (PDL). The State entity that acquires the interest is the PNG National Oil Company, Kumul Petroleum Holdings Limited (KPHL). A percentage of the KPHL interest is provided to the Landowners and Provincial Government and generally administered through the Mineral Resources Development Company (MRDC) that looks after these interests.

Two major hydrocarbon developments have occurred and continue to be developed in PNG:

1. The Kutubu Fields, initially developed by Chevron and its JV partners in the 1990s, then from 2004 by Oil Search Limited and after merger in 2021 by Santos Limited. Thes fields have produced over 500 million barrels of oil and developed the oil export route to an offshore loading terminal in the Gulf of Papua. Presently these fields are in decline and gas caps are being developed as further resource for the PNG LNG Project.
2. The ExxonMobil operated PNG LNG Project, sanctioned in 2009 and on production since 2014 has developed the giant Hides Gas Field and surrounding gas fields and associated gas reserves.

A number of discovered resources are awaiting sanction including the TotalEnergies operated Elk-Antelope field that is presently in FEED as the Papua LNG Project and the ExxonMobil operated P’nyang field that makes up the P’nyang LNG Project. Offshore gas discoveries at Pasca is being investigated for Development by Trinza and KPHL is looking to commercialise the Pandora Field.