Papua New Guinea has the potential for substantial unconventional oil and gas resources, possibly significantly greater in magnitude than the country’s known conventional oil and gas reserves. Such was the conclusion of preliminary geological and geophysical assessment conducted by South Pacific Resources Limited (SPB), which subsequently lodged applications for five unconventional hydrocarbon licenses covering 75,000 square kilometres.
The company believes that Papua New Guinea has large proven reserves of conventional oil and gas that testify to the presence of excellent quality petroleum source rocks. Like many sedimentary basins around the world with large conventional petroleum deposits, certain areas of the country also have good quality source rocks with the potential to host large volumes of unconventional oil and gas. As worldwide demand for clean energy increases, large volumes of potential new resources locked in shale and tight reservoirs are being keenly sought.
Following new legislation, enacted in February 2016, to enable exploration for, and development of, unconventional oil and gas resources in Papua New Guinea, the country may join many other countries around the world in exploring for domestic shale and tight gas reserves. The new legislation replaced the Oil and Gas Act of 1998 which specifically excluded exploration for unconventional sources of oil and gas.
Over the past few years SPB has been working alongside Petroleum and Energy Minister Micah, former Ministers Duban and Duma, and the Papua New Guinea Department of Petroleum and Energy, in assessing the country’s potential for shale gas. Also, the project has been undertaken with the full knowledge and support of the Prime Minister, the Hon. Peter O’Neill.
Due to SPB’s close relationship with the Papua New Guinea government, Minister Micah reserved the licenses for five years ensuring the company faces no competition.
The applications lodged by SPB for the unconventional hydrocarbon exploration and development in Papua New Guinea cover:
- The shales surrounding the producing Foldbelt oil and gas fields, which could potentially provide the resources to extend the lives of the Kutubu, Gobe / SE Gobe, and other diminishing fields in the Foldbelt;
- The shales surrounding the Hides, Juha and P’Nyang gas fields that presently provide gas for the Papua New Guinea LNG Project, for which a third train is presently being contemplated;
- The highly prospective shales surrounding the Elk / Antelope / Triceratops gas discoveries that comprise the proposed Papua LNG Project which is presently awaiting confirmation of sufficient reserves to enable the project’s proponents to reach FID;
- The areas surrounding the proposed Stanley LNG Project in Western Province, which is presently looking for additional reserves sufficient to underpin a small scale LNG project; and
- A large area of the Foreland where a number of stranded unconventional oil and gas fields presently sit.
In recognition of SBP’s relationship with the Papua New Guinea government over the past few years the five applications will be reviewed and considered as a priority.
In the meantime, the country’s Petroleum and Energy department is allowing SBP to continue ongoing exploration and early drilling.
The new hydrocarbons legislation will allow Papua New Guinea to develop the nation’s previously untapped unconventional oil and gas reserves.
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