Papua New Guinea Oil and Gas Report Q1 2013
Business Monitor International, November 2012, Pages: 66
BMI View:
Plans to commercialise Papua New Guinea’s gas potential with a number of LNG projects continue to advance. With first gas from Exxon's PNG LNG projects set for 2014, the country is on track to benefit from its strategic location and sizable unused reserves. The entrance of new players such as Total and potentially Shell to the country's upstream could support new LNG projects and revive existing proposals. However we highlight that unlike our bullish outlook for gas production, we forecast that falling liquids production will by 2021 leaving PNG with a net import requirement of some 46,400b/d.
The main trends and developments we highlight for PNG’s Oil and Gas sector are:
- First gas from the US$15.7bn ExxonMobil-led PNG LNG project could treble PNG’s exports and boost its GDP by at least 20%. The project remains on track for first gas in 2014, and Exxon and its partners continue to aggressively target the reserves to support a third train at the facility.
- InterOil's Liquid Niugini (Gulf LNG) project could be revived after nearly being cancelled by the frustrated PNG government. Negotiations continue with Royal Dutch Shell for a stake in the upstream fields and terminal itself.
- However the latest proposal set forth by Inter Oil would see stakes in the Elk-Antelope fields that underpin the project sold off to the PNG government in order to advance the delayed project.
- Total’s farm-in agreement with Oil Search adds a proven player to the country’s upstream, and the French IOC has already announced its intention to become the operator of an LNG facility and move ahead with a robust exploration schedule in 2013.
- We expect oil production to average 34,000b/d in 2012 while consumption is forecast to rise by around 5.0% per annum to 2021, implying demand of around 71,400 barrels per day (b/d) by the end of the forecast period. The net import requirement would therefore be approximately 46,400b/d by 2021.
- Rising competition in the LNG market in Asia, as well as from new sources of supply abroad,
could undermine the commercial viability of greenfield export projects in PNG. This remains a downside risk to the sector's development.
By 2021, the net crude oil import requirement is expected to rise to 46,400b/d, costing some US$1.55bn at an assumed OPEC basket oil price of US$91.50/bbl. Gas exports are forecast to rise towards 21bcm by 2021, bringing in potential revenues of US$10.05bn. Potential petroleum export revenues for 2021 are therefore estimated at US$8.50bn, with LNG export revenues dwarfing the cost of rising oil imports. At the time of writing we assume an OPEC basket oil price for 2012 of US$107.05/bbl, falling to US$99.10/bbl in 2013.
BMI Industry View 5
SWOT Analysis 6
Papua New Guinea Oil and Gas SWOT 6
Industry Forecast Scenario 7
Oil And Gas Reserves 7
Table: Papua New Guinea Proven Oil & Gas Reserves And Total Petroleum Data – Historical Data And Forecasts, 2010-2016 7
Table: Papua New Guinea Proven Oil & Gas Reserves And Total Petroleum Data – Long-Term Forecasts, 2015-2021 8
Oil Supply And Demand 10
Table: Papua New Guinea Oil Production, Consumption And Net Exports – Historical Data And Forecasts, 2010-2016 10
Table: Papua New Guinea Oil Production, Consumption And Net Exports – Long-Term Forecasts, 2015-2021 11
Gas Supply And Demand 14
Table: Papua New Guinea Gas Production, Consumption And Net Exports – Historical Data & Forecasts, 2010-2016 14
Table: Papua New Guinea Gas Production, Consumption And Net Exports – Long-Term Forecasts, 2015-2021 15
LNG 18
Refining And Oil Products Trade 21
Table: Papua New Guinea Refining – Production And Consumption – Historical Data & Forecasts, 2010-2016 21
Table: Papua New Guinea Refining – Production And Consumption – Long-Term Forecasts 2015-2021 21
Revenues/Import Costs 23
Key Risks To our Forecast Scenario 23
Country Risk/Reward Ratings 24
PNG Upstream Rating 24
PNG Downstream Rating 24
Regional Risk/Reward Ratings 25
Table: Asia's Oil & Gas Risk/Rewards Ratings 25
Table: Asia Upstream Risk/Reward Ratings 30
Table: Asia Downstream Risk/Reward Ratings 31
Papua New Guinea Energy Market Overview 32
Overview/State Role 34
Licensing and Regulation 34
Government Policy 34
International Energy Relations 35
Table: Papua New Guinea – Upstream Projects Database 35
Oil And Gas Infrastructure 36
Oil Refineries 36
Table: Downstream Projects 36
Service Stations 36
Oil Storage 36
LNG Terminals 36
Gas Pipelines 39
Competitive Landscape 40
Executive Summary 40
Table: Key Players – PNG Oil And Gas Sector 41
Table: Upstream Players 41
Table: Downstream Player 41
Company Profiles 42
Oil Search 42
InterOil 46
Esso Highlands – Summary 49
Santos - Summary 49
Talisman Energy - Summary 49
Kina Petroleum - Summary 50
Horizon Oil - Summary 50
Papua Petroleum - Summary 51
Blue Energy – Summary 51
Eaglewood Energy – Summary 51
LNG Energy – Summary 52
Others – Summary 52
Regional Energy Market Outlook 53
Table: Number Of Rigs In Operation In Asia 54
Global Energy Market Outlook 59
Table: Global Oil Demand Forecasts – A Comparison 61
Asia – Regional Appendix 65
Table: Oil Consumption – Historical Data & Forecasts, 2009-2016 (’000b/d) 65
Table: Oil Consumption – Long-Term Forecasts, 2014-2021 (’000b/d) 65
Table: Oil Production – Historical Data & Forecasts, 2009-2016 (’000b/d) 66
Table: Oil Production – Long-Term Forecasts, 2014-2021 (’000b/d) 67
Table: Refining Capacity – Historical Data & Forecasts, 2009-2016 (’000b/d) 68
Table: Refining Capacity – Long-Term Forecasts, 2014-2021 (’000b/d) 68
Table: Gas Production – Historical Data & Forecasts, 2009-2016 (bcm) 69
Table: Gas Production – Long-Term Forecasts, 2014-2021 (bcm) 70
Table: Gas Consumption – Historical Data & Forecasts, 2009-2016 (bcm) 70
Table: Gas Consumption – Long-Term Forecasts, 2014-2021 (bcm) 71
Table: LNG Exports – Historical Data & Forecasts, 2009-2016 (bcm) 72
Table: Net LNG Exports – Long-Term Forecasts, 2014-2021 (bcm) 72
Methodology And Risks To Forecasts 73
Glossary Of Terms 74
Table: Glossary of Terms 74
Oil And Gas Risk/Reward Ratings Methodology 76
Ratings Overview 76
Table: BMI’s Oil & Gas Business Environment Ratings – Structure 77
Indicators 77
Table: BMI’s Oil & Gas Upstream Ratings – Methodology 77
Table: BMI’s Oil & Gas Business Environment Downstream Ratings – Methodology 78
BMI Methodology 80
How We Generate Our Industry Forecasts 80
Energy Industry 80
Cross checks 81
Sources 81
Company Profiles
Oil Search
InterOil
Esso Highlands – Summary
Santos - Summary
Talisman Energy - Summary
Kina Petroleum - Summary
Horizon Oil - Summary
Papua Petroleum - Summary
Blue Energy – Summary
Eaglewood Energy – Summary
LNG Energy – Summary
Others
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