Energy

Although Papua New Guinea relies mostly on fuel oil and diesel to generate electricity, it holds an abundance of gas, geothermal, hydro and solar energy potential. If exploited sustainably, PNG could not only meet its domestic energy requirements, but also supply reliable, cost-competitive power to its neighbours. The extractives industry is the highest consumer of energy, at 45% of the total, followed by transport (40%), and agriculture, residential and commercial activities (15%). Although crude oil production is set to decline, liquefied natural gas output is expected to double to 16m tonnes by 2024, provided the planned expansion and development projects go ahead. The temporary disruption in oil and gas production as a result of the earthquake that struck in February 2018 was offset by a rise in international oil prices over the year. The government expects oil prices to average $57-66 per barrel between 2019 and 2022, while LNG prices are to remain steady at $9 per 1000 cu feet. This chapter also contains interviews with Hiroshi Hosoi, CEO, JX Nippon Oil & Gas Exploration Corporation; Wapu Sonk, Managing Director, Kumul Petroleum; and Peter Botten, Managing Director, Oil Search.