CHEVRON OUTLINES PAPUA NEW GUINEA PROJECT

May 14, 1990
A group led by Chevron Nuigini Pty. Ltd. has submitted plans for development of fields in Papua New Guinea's southern highlands. The Chevron group's application for a petroleum development license sets the stage for Papua New Guinea to become a crude oil exporter in the mid-1990s. Total development cost for Iagifu, Hedinia, and Agogo fields earlier was estimated at $850 million (OGJ, Feb. 19, p. 31). Plans call for production to start in third quarter 1992 and build to 90,000 b/d.

A group led by Chevron Nuigini Pty. Ltd. has submitted plans for development of fields in Papua New Guinea's southern highlands.

The Chevron group's application for a petroleum development license sets the stage for Papua New Guinea to become a crude oil exporter in the mid-1990s.

Total development cost for Iagifu, Hedinia, and Agogo fields earlier was estimated at $850 million (OGJ, Feb. 19, p. 31). Plans call for production to start in third quarter 1992 and build to 90,000 b/d.

Partners in the project with operator Chevron are BP Petroleum Development Ltd., Ampol Exploration (PNG Petroleum) Inc., BHP Petroleum (PNG) Inc., Oil Search Ltd., and Merlin Petroleum Ltd.

Elsewhere in Papua New Guinea, the Chevron group still sees updip potential on a huge structure after drilling the 4 Mananda dry hole near Agogo field.

And a combine of Conoco Inc. and Esso Papua New Guinea Inc.'s 1 Tarim wildcat near the OK Tedi copper mine is expected to reach the targeted main Toro sand by the end of May.

DEVELOPMENT PLANS

Chevron and partners had not been able to meet earlier deadlines for submitting development plans because difficulties with drilling and obtaining seismic data in the densely forested limestone karst area prevented them from proving enough reserves to justify development.

The government extended the deadlines to give the group time to finish drilling more appraisal wells.

Earlier indications were that the group proved enough reserves to meet a minimum reserves target of 120-140 million bbl of oil. Chevron and partners at first had hoped to prove 150 million bbl.

Chevron and partners now base their development plans on proven reserves estimated at 170 million bbl of crude oil.

The Chevron group's Kutubu project will involve development of the main Toro sandstone reservoir and smaller Digamu reservoir in Iagifu and Hedinia fields and the Digamu sand in Agogo. All are Jurassic.

The national and provincial governments and local landowners will review the license application for approval, which could take at least several months.

PROJECT DETAILS

The Chevron group plans to lay a 260 km, 20 in. pipeline south from the highlands fields to a tanker loading buoy 25 miles offshore in the Gulf of Papua.

In addition to field production facilities and gathering lines, the development support infrastructure will include an airstrip capable of handling a Hercules transport plane, a 110 km access road to link with the main highlands highway from Lae, telecommunications facilities, and a field topping plant.

The topping plant will supply Chevron's field and aircraft fuel as well as fuel for the highlands region.

Oil will move by gravity feed through the pipeline to the offshore portion of the line. Plans call for installation of pump stations later if needed, with the line's capacity expandable to 300,000 b/d.

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