What Exxonmo­bil learned in Pa­pua New Guinea

The gi­ant Exxonmo­bil-led PNG LNG project has proven Pa­pua New Guinea is a vi­able place to carry out ma­jor re­sources projects. For­mer Exxonmo­bil PNG Man­ag­ing Direc­tor Peter Gra­ham re­flects on the lessons learned.

Business Advantage Papua New Guinea - - Petroleum & Gas - Busi­nes­sad­van­tagepng

(BAPNG): What was the crit­i­cal fac­tor in get­ting the PNG LNG project com­pleted on time? Peter Gra­ham (PG): Align­ment with the Gov­ern­ment was crit­i­cal, and I think the Gov­ern­ment recog­nised very early on that this was a trans­for­ma­tional project. That truly was crit­i­cal from the out­set.

With­out their sup­port and di­rec­tion from the then-prime Min­is­ter, Sir Michael So­mare, and sub­se­quently from Peter O’neill, it would have been far more chal­leng­ing to achieve what we have done. Agen­cies and de­part­ments across all lev­els of Gov­ern­ment have stepped up and done an ab­so­lutely spec­tac­u­lar job.

Noth­ing got held up on the docks, per­mits and visas were pro­cessed in an ex­tremely timely man­ner. That sort of achieve­ment is world class, but the Gov­ern­ment gave it spe­cial project sta­tus—that was crit­i­cal. BAPNG: Exxonmo­bil was com­pletely new to PNG when this project started. So what tips and rec­om­men­da­tions would you pass on to new­com­ers? PG: I think prob­a­bly num­ber one is learn­ing how to deal with com­mu­ni­ties. It’s just so crit­i­cal in Pa­pua New Guinea, par­tic­u­larly when it comes to ac­cess to land—and you can’t do any­thing with­out ac­cess to land. I think that was prob­a­bly one of the ear­li­est and tough­est lessons for us to learn.

A lot of our projects else­where in the world are off­shore, and you don’t have landown­ers to deal with off­shore! But with an on­shore project, learn­ing how to co-ex­ist with landown­ers and un­der­stand­ing the strong bond landown­ers have with their land… it took us a while to fig­ure out how to make it work, and how to re­late to those tra­di­tional landown­ers and find so­lu­tions that were mu­tu­ally ben­e­fi­cial. Now, I think we have very strong re­la­tion­ships and a mu­tual un­der­stand­ing and re­spect. BAPNG: The chal­lenge now is to make the most of the in­fra­struc­ture that you built for the PNG LNG project, and the most ob­vi­ous thing is to ex­tend to a third train. What are the prospects? PG: I think the prospects are good. How­ever, there is work that needs to be done be­fore you can start talk­ing se­ri­ously about the next step. The start­ing point for any devel­op­ment is ac­cu­mu­lat­ing proved re­serves, and it’s a chal­lenge for ev­ery devel­op­ment, not just us. We are on our way, though. BAPNG: What’s the lat­est on the prospects of us­ing some of the gas for do­mes­tic en­ergy? PG: We have signed an MOU with the PNG Gov­ern­ment to sup­ply up to 20 mil­lion cu­bic feet a day of nat­u­ral gas for 20 years to sup­port gov­ern­ment plans to im­prove the ca­pac­ity and re­li­a­bil­ity of the coun­try’s power sup­ply.

We think that this is a great step to­wards im­proved sup­ply for Port Moresby, and will be work­ing with PNG Power and do­ing our best to sup­port them so they can quickly ac­cess the power.

We’ve also had a long­stand­ing com­mit­ment un­der the Gas Agree­ment to sup­ply four mil­lion cu­bic feet a day in the High­lands for power gen­er­a­tion, and we stand ready to de­liver that as well.

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