The country has a relatively short history of oil and gas production after first discoveries were made in the 1980s. Hides gas field was discovered in 1987 by Hides 1X well while PNG’s first commercial oil field was discovered in Kutubu by Iagifu 8X well in 1986. Hides started gas production in 1991 to generate electricity for the neighboring Porgera gold mine in the Enga Province. This was followed by export oil production in Kutubu in June 1992, Gobe in March & Moran in April of 1998. South East Mananda came on production in December 2006 and North West Moran was found to be hydraulically connected to the main Moran field through the Toro sandstone. All the oil fields are now experiencing natural production decline while gas and water production started to increase over the last few years.

These production problems are expected to increase over the remaining years as the fields mature. To slow down the rapid oil production decline, the operator's field production strategy is effective management of the well head choke size, maintain gas & water injection, gas lift, facility optimization and apply selected well intervention techniques to improve oil production. While trying to optimize oil production and improve revenue from all the oil fields, the operating costs have increased significantly. The identified main cost areas are drilling in-fill wells, re-drills, well interventions or work-over, water and sand handing facilities and field maintenance costs. These costs are necessary to maintain oil production, but what makes the field economic is sustained elevated oil price. The oil price has been predicted to pick up after a free fall in 2008.


Figure 2: Petroleum Projects indicated by PDLs- 1, 2, 3, 4, 5 & 6


Figure 3: Production Profile since First oil and 2009 Forecast at the tail end


Figure 4: Total oil produced since first oil for each respective field

The remaining total oil reserves of 5.2 million barrels have been used to generate the following annual production forecast for all the MRDC subsidiary companies.


Figure 5: Total oil production forecast for PR Companies