Papua New Guinea is poised to become a crude oil exporter in the mid-1990's.
A group led by Chevron Nuigini Pty. Ltd. has proved enough reserves to justify the country's first oil field development program. It's in the lagifu-Hedinia area of the Southern Highlands.
The group plans to submit a detailed field development schedule to Papuan authorities in May. Oil exports could begin in 1993.
In addition, BP (Papua New Guinea) Pty. Ltd. has drilled Papua New Guinea's first significant onshore gas/condensate discovery outside the Southern Highlands.
BP Petroleum Development Ltd. and Oil Search Ltd. late last year applied for a license to develop 1.5-2 tcf Hides gas field (OGJ, Oct. 30, 1989, p. 31).
IAGIFU-HEDINIA
The Chevron group was required by its license to submit a development application for lagifu-Hedinia by last Nov. 28. But at the time Chevron had not proved enough reserves to justify spending on a project in this high cost area.
Appraisal work has been hampered by the lack of seismic data and difficulties of drilling in the densely forested limestone karst area.
Chevron was given an extension to Mar. 1, 1990, to complete the appraisal.
The last few appraisal wells confirmed enough reserves to meet the group's target of 120-140 million bbl. The group originally had hoped to prove reserves of more than 150 million bbl.
lagifu-Hedinia development will require a 170 mile pipeline from the Southern Highlands to the southern coast and a tanker terminal about 25 miles offshore. The pipeline system will have a capacity of 150,000 b/d.
Total development cost will be more than $850 million, down from a previous estimate of more than $950 million.
The group has spent about $250 million for exploration and another $30 million for engineering studies.
Group members are Chevron 25%, BP Petroleum Development 25%, Ampol Exploration (PNG Petroleum) Inc. 14.983%, BHP Petroleum (PNG) Inc. 12.5%, Oil Search Ltd. 10.017%, and Merlin Pacific Oil Co. NL and Merlin Petroleum Co. 6.25% each.
BP DISCOVERY
BP's 1 Elevala, drilled to 3,216 m on License PPL 81, flowed 11.9 MMcfd of gas and 634 b/d of 54 gravity condensate through a 1/2 in. choke from perforations at 3,060-72 m.
The strike lies 50 km east of Kiunga and 750 km northwest of Port Moresby. It is the first discovery in the foreland region of the Papuan basin and the first well drilled in the region in 9 years.
BP drilled the well on a farmout from license operator Santos Ltd. As part of the deal, BP is required to drill another well this year in the license area and conduct more than 500 km of seismic surveys.
Upon completion of the program, BP will hold a 55% interest in the license, with Santos holding the remainder.
Ross Adler, Santos managing director, called the Elevala structure "very large."
He said the partners have identified a number of prospects that could be the targets for future drilling in the license."
Adler said assessment of the Elevala discovery should be comparatively easier than discoveries in the Papuan fold belt.
"Geologically the foreland basin is a lot simpler than the fold belt and would require less appraisal work than the more complicated structures in the highlands," he said.
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