Energy
From The Report: Papua New Guinea 2014
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The near future will bring positive change for the energy sector and the economy as a whole, as the investment and construction phase of the $19bn Papua New Guinea liquefied natural gas (LNG) project winds down and the first shipments of gas begin to flow. Progress is also being made in the utilities sector, with major power generation projects and the expansion of water and sewage networks. The billions of dollars invested in the PNG LNG project have trickled down across nearly all sectors of the economy, from services to real estate, as the country waited for export revenue streams to come on-line. The government will now start to see a more direct impact on its bottom line as LNG exports begin to move. How much progress takes place across the sector – and how rapidly it occurs – may rely in large part on government cooperation with the private sector and on ongoing changes to the regulatory framework. This chapter contains interviews with Peter Graham, Managing Director, ExxonMobil PNG; Michael Hession, CEO, InterOil; Peter Botten CEO, Oil Search; and Raka Taviri, Water PNG.

Articles from this Chapter

Overview

With the LNG project just starting, the opportunities are numerous
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The near future will bring positive change for the energy sector and the economy as a whole as the investment and construction phase of the $19bn Papua New Guinea liquefied natural gas (LNG) project winds down and the first shipments of gas begin to flow from the ExxonMobil facility. Even with the optimism surrounding this signature achievement, focus is already being shifted onto the next generation of projects and the development of other oil and gas plays in the country. Progress is also being…

Interview

A fresh start: OBG talks to Peter Graham, Managing Director, ExxonMobil PNG
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Interview:Peter Graham How is the completion of the Papua New Guinea liquefied natural gas (LNG) project likely to affect the country economically and geopolitically? PETER GRAHAM: I am happy to say that the PNG LNG project shipped its first cargo on May 25, 2014, after starting production months earlier than planned. There are not many projects in the Asia-Pacific region that can say they’re ahead of schedule, and I think this achievement demonstrates to the world that a project of this…

Interview

OBG talks to Michael Hession, CEO, InterOil
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Interview:Michael Hession How can the oil industry help contribute to the broader economic development of Papua New Guinea and the well-being of its citizens? MICHAEL HESSION: One primary way is through jobs. Our company believes in local talent and is committed to developing it. Today, InterOil employs more than 1100 people in PNG, ranging from experts in drilling and logistics to community relations specialists. The overwhelming majority are locally hired, and their wages in turn support…

Analysis

Recent projects have piqued investors’ interest in new possibilities
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Much of the rapid growth that has occurred over the past decade across a wide swath of Papua New Guinea’s economy has been either directly or indirectly the result of massive investments and projected future earnings of the ExxonMobil PNG liquefied natural gas (LNG) project. As this project prepares for its first delivery starting in 2014, many are looking for the next big resource project to fill the void and fuel a new wave of investment. The most likely candidate to fulfil this role is the…

Interview

OBG talks to Peter Botten, CEO, Oil Search
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Interview:Peter Botten The first liquefied natural gas (LNG) cargos have left Papua New Guinea en route to Asian markets. What does that mean for PNG and Oil Search? PETER BOTTEN: PNG was able to deliver one of the most complex projects in the energy sector to date. Having begun construction in the middle of a global financial crisis, the project was delivered ahead of schedule against all odds. I believe all stakeholders in the project should be congratulated, including governments, landowners…

Interview

OBG talks to Raka Taviri, CEO, Water PNG
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Interview:Raka Taviri PNG Water has the task of reaching 15 districts and two towns in the next five years. What does this mean for the firm and how will you fund it? RAKA TAVIRI: Bringing a water system to a district, which includes both production and delivery of water supply, costs between PGK5m ($2m) and PGK10m ($4.1m) in PNG, depending on the location and the size of the population. If you multiply this for the rest of the country, adding the costs of maintenance of the existing system,…

Analysis

The country’s hydro resources have the potential to transform the utilities segment
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With thousands of kilometres of rivers and monthly average rainfall often exceeding 300 mm, Papua New Guinea is well suited for hydropower production. Unfortunately, the same geography and climate that makes the country conducive for power development also creates barriers to its development. Most notably its rugged features pose significant challenges to connecting locations conducive to building hydropower plants to the industrial and population centres that need power. These challenges, along…

Analysis

Future developments could largely depend on regulatory and structural changes
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As the energy industry takes on an increasingly important role within the economy, the government of Papua New Guinea has been moving in recent years to update its regulatory framework for the sector through the creation of new government entities and an overhaul of related laws. Under the current Oil and Gas Regulation of 2002, which updated the 1998 Oil and Gas Act, exploration and production activities are regulated by the Department of Petroleum and Energy (DPE). Making Changes The system is…