CO-OPERATION between government, landowners and communities and a sound oil and gas regulatory regime are important factors in encouraging further investment in PNG, according to the new managing director of ExxonMobil PNG.
Speaking at a Leadership Summit on 9 February, Andrew Barry said the factors that had made the PNG LNG project successful would help encourage others to invest.
“But a word of caution is needed. When things go as well as they have for the Project some may take the view that it was easy – it was not,” he said.
“Project success took a massive effort in terms of human resource, financial capital, project management, and technical know-how to achieve.”
Mr Barry was speaking at the PNG Leaders’ Summit, held in Port Moresby for all heads of government departments and state-owned entities to provide reports on their latest activities.
In his presentation, Mr Barry praised the efforts of the PNG government to encourage new investment in the nation, saying that efforts to increase revenue transparency and mechanisms to support the country’s development aims would further develop its reputation.
“Continue efforts that support political, fiscal and legislative stability,” he said.
“As noted earlier industry investments require a long term-view, something that such stability is critical to achieving.”
Mr Barry said that while PNG boasted abundant resources, it was challenged by physical conditions that added cost and complexity to projects.
“The wells we are drilling today in the Highlands are some of the most complex our company is undertaking globally, a complexity that is magnified by difficult topography and geographical remoteness,” he said.
“Ensuring that new PNG projects are globally competitive, given such challenges, is important for all of us to recognise.”
In his presentation, Mr Barry also praised the Department of Petroleum and Energy’s moves to increase transparency and enforcement around exploration acreage licenses, providing regular release timetables to help companies decide
whether they would participate.
“Finally, I wanted to thank the Government for its efforts to continue to protect the nation’s critical economic infrastructure while supporting and serving the communities within which we operate,” he said.
Mr Barry said that while current low commodity prices would put strain on resources sector dependent economies, the benefits of projects such as PNG LNG would remain as long as the fundamentals of the project were strong.
“Many market analysts may suggest that the oil and gas prices present at startup were above historical averages. As such this higher set of prices multiplied the benefit of early production and exports,” he said.
“Going forward monthly and annual revenues will continue to fluctuate, thus the key to success is having a long-term view, while taking the necessary actions to ensure that project fundamentals remain strong and that LNG production continues uninterrupted.”