Papua New Guinea as an Exploration Destination – Where We’ve Been and Where We’re Going
Papua New Guinea has a rich exploration history, dating back to the first discovery in 1956. However, the associated challenges with operating in an under commercialized environment with difficult terrain has left the country underexplored. So, do we need more exploration in PNG and what challenges lay ahead? Nearly 7,000 MMboe has been discovered in Papua New Guinea (PNG) so far, 42% of which comes from the three largest fields which were discovered between 1987 and 2006. With such a large proportion of reserves spread across just one basin and a few fields, the field size distribution suggests yet to finds within the proven fairways could be tens of Tcf, and frontier basins could prove to be new hydrocarbon provinces in years to come. All of the discoveries to date lay within the Papuan Basin, only 30% of the reservoirs units and 22% of the plays have produced hydrocarbons - from the Early Cretaceous to Lower Jurassic clastics. The good news is that 85% of the basin’s reserves remain to be produced and the production forecast looks healthy as rates could double in the next 10 years from those same plays and reservoirs. But, the key projects remain unsanctioned. There are options to diversify production to include Miocene carbonate reservoirs and move offshore for the first time, but the step-up to include other, untested potential reservoirs will require a new level of exploration. Just 10% of exploration wells drilled lie outside of the Papuan Basin, which have tested a range of targets from fractured igneous and volcanic basement plays to reefal structures and clastics. However, several operators continue to hold acreage, mature prospects and plan wells in frontier basins; these could offer a new, untapped resource opportunity to boost future supply. High success has been seen in the Papuan Basin with 28 MMboe per new field wildcat drilled and yet to finds along the proven Jurassic clastic and Miocene carbonate plays could reach in excess of 30 Tcf. Venturing into the Cape Vogel and Papuan Plateau basins, the potential increases significantly but will require testing. Planned exploration programmes in both the proven and un-proven areas hope to target multi Tcf gas + billion barrel oil potential over the next two years which could be decisive in preparing the next wave of exploration programmes. For new exploration investment, be it nearfield, neighbouring proven plays, or frontier, development concepts promoting early monetisation for any success can be essential. In PNG, finding a route to market for gas, condensate and oil discoveries come with their own challenges due to remote locations, limited infrastructure and a low local demand. Dry gas discoveries could face ullage backlog for LNG production until around 2035 under the proposed liquefaction capabilities, but new technologies and options for aggregation can provide attractive options. Local supply of wet and sour gas through establishing new industries, such as the considered increased methanol production in New Zealand in the case of Canterbury Basin exploration success, is perhaps another option. The government’s drive to establish attractive fiscal terms and provide third party access to infrastructure shows support to monetise a wider range of assets. The proposed paper would aim to review the exploration history of PNG, focusing on the successful plays and key failures. This review would extend to the exploration outlook around proven trends and the frontier potential through key prospect analogues. To conclude, the paper would present analogues for the challenges of discovering varying hydrocarbon content, volumes and locations, along with offering a global perspective of LNG competition from emerging sources such as Nigeria and the USA.
AAPG Datapages/Search and Discovery Article #90371 © 2020 AAPG Asia Pacific Region, The 1st AAPG/EAGE PNG Geosciences Conference, PNG’s Oil and Gas Industry: Maturing Through Exploration and Production, Port Moresby, Papua New Guinea, February 25-27, 2020