Global attention towards Papua New Guinea's gas reserves continues to grow as Australian mining magnate Clive Palmer announced this week that he has discovered one of the world's largest gas fields in PNG.
His company Palmer Petroleum has found the offshore field in the Gulf of Papua which Mr Palmer says could be worth more than US$35 billion.
This comes as ExxonMobil's major LNG project in PNG nears completion, while there has been a separate find in the Gulf, and other land-based gas finds in the country.
An oil and gas sector analyst for UBS, Nik Burns, told Johnny Blades that even beyond these developments, there's considerable interest from major players.
NIK BURNS: We've seen companies like Total, a French company, really keen to come in there. They're currently enjoying a joint venture with an Australian company Oil Search exploring off the coast of PNG at the moment. They've drilled a couple of wells. Unfortunately, both of them weren't successful, but Oil Search is now going it alone with a third well and they're hoping to find a significant quantity of gas there.
JOHNNY BLADES: Now, InterOil also has a discovery or two, and that's been a little bit controversial, I believe, because the PNG government wants them to partner up with a major player. And the minister, William Duma, has said that InterOil is not big enough to develop it by itself. Is that right?
NB: Yeah. So what's publicly stated here is exactly as you said. And what we've been told is that in recent times ExxonMobil entered exclusive discussions with InterOil about buying into around 4.7 trillion cubic feet of gas. Now, again, there's been press in the last couple of days to suggest that those discussions have gone non-exclusive. But prior to that, Oil Search was certainly talking up the potential for that gas if that deal was consummated to potentially come into their LNG project. So this is the one which is 90% complete. But what you can be sure about is that there is a lot of gas in PNG and there's a lot of undeveloped gas. So the future looks pretty bright. I guess the fact that Exxon is very keen to buy into this field, they're a global player and LNG is a global product. We've seen a huge growth in LNG supply options out of the US, Western Canada and East Africa over the last few years. But here's Exxon making a statement, saying that they are very keen to buy into more PNG gas. I guess it bodes well for the country in that respect.
JB: Does PNG's history or track record of being a location for minerals and for oil - there's a bit of oil, isn't there, up in the Southern Highlands - does that encourage investors to come in and look for the gas?
NB: There's no doubt that political and fiscal certainty is something which is front of mind for a lot of investors. And one of the key planks that Exxon wanted and the joint venture partners there wanted in place before they committed to this $19 billion project was some certainty that the fiscal arrangements would not change. So they entered into an agreement before the project started, with the government, which they call the Fiscal Stability Agreement. And that basically is an agreement with the government to say that the fiscal terms will not change throughout the life of the project. And once that was in place that was really a key plank. And it gave the joint venture confidence that they could proceed.