16 Apr 2003

PNG revenue from oil exports could dry up in a year

3:52 pm on 16 April 2003

Papua New Guinea's Minister for Petroleum and Energy says if the current rate of decline in oil production continues, government revenue from petroleum exports will dry up by the end of next year.

Sir Moi Avei says that the government will face a serious financing gap from now until 2012 because oil production is declining at a rate of 20 percent annually.

Speaking on a talkback radio show in PNG, Sir Moi said that national output has dropped form a peak of 150-thousand barrels a day to less than 60-thousand partly because of the severe fiscal policies of past governments.

His comments come after ChevronTexaco announced that it would pull out of PNG and its joint ventures in the country's main oil and gas fields in October this year.

Sir Moi says tax changes by the Somare government has seen oil exploration spending rise from 37.7 million US dollars to 134.65 million in the first quarter of this year.

But he says the long lead times betwen exploration and development mean that any new finds would not help the government out of its present difficulties.