Oil began to be produced in Papua New Guinea in 1992
after heli-borne rigs were used to explore in the remote jungle ridges.
Fields clustered in the Kutubu complex remain the only oil and gas
producers. Apart from brief increases in output in the late 1990s
production had been in permanent decline up to 2002 when output
It is forecast that new a LNG gas development, firstly tapping gas
fields in the Papuan Fold Belt, after a pipeline project to Australia
was abandoned, will lead to considerable growth in gas production after
2013. The processing plant will also be tied into offshore discoveries
in the Gulf of Papua. Associated liquids production from these fields
should lead to small increases in oil output allowing the oil production
plateau to be maintained.
Oil demand in Papua New Guinea is not great but there
will be some minor growth as the country’s economy expands, ceasing in
2016 when prices begin to rise again. The country is a net oil exporter,
and exports will increase a little after 2014 when liquids from new gas
developments come onstream.
PNG consumes very small quantities of local gas. However, after it
begins to produce LNG, the ready supply of gas will create some growth
in indigenous gas use.