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Bank of Papua New Guinea (BPNG) Governor Elizabeth Genia has outlined a broad financial-sector reform agenda aimed at strengthening monetary and financial stability, expanding financial inclusion and creating a more competitive and modern financial system to support investment and sustainable economic growth. Speaking at the Business Advantage PNG Investment Conference in Brisbane on 10 August 2026, Genia said stability must remain the foundation of Papua New Guinea’s economic development, as businesses, households and investors require confidence and predictability to make long-term decisions. Her address, titled “Driving Financial Sector Reform, Inclusion and Stability”, highlighted reforms across monetary policy, banking regulation, payments infrastructure, foreign exchange, financial inclusion, green finance and prudential supervision. Genia said the Bank’s statutory mandate under the Central Banking Act places price stability as its primary objective, followed by financial stability and the promotion of sustainable medium-term economic growth, particularly in the non-mineral and non-petroleum sectors. “A stable financial system allows savings to be channelled towards productive investment and supports the flow of credit through the economy, giving households and businesses greater certainty when planning for the future,” she said. On price stability, Genia said headline inflation is forecast at around 4 per cent in 2026, with underlying inflation measures expected to remain at or just below that level through 2027 and 2028. She said the convergence of headline and underlying inflation measures provides greater confidence in the medium-term inflation outlook, although the Bank remains alert to external and domestic risks. The re-emergence of the El Niño weather pattern is already affecting mining operations and domestic food production, she said, making weather-related pressures an area of close monitoring for the central bank. Genia also highlighted the impact of exchange-rate movements on inflation, noting that in recent years the exchange rate has played a stronger role than the Kina Facility Rate (KFR) as the nominal anchor for inflation. The Bank’s longer-term objective is for the KFR to become a more effective monetary-policy instrument. A key part of the reform agenda is restoring greater flexibility and convertibility in the foreign-exchange market. Genia said the Kina is now approximately 20 per cent lower against major currencies than it was in January 2023, describing the depreciation as measured and gradual, with minimal impact on inflation and broader macroeconomic stability. “As the exchange rate adjusted lower and inflows strengthened, the backlog of outstanding FX orders fell significantly,” she said. According to Genia, the reduction in the foreign-exchange backlog is one of the clearest indications that the market is moving closer to equilibrium. While PNG has not yet achieved full Kina convertibility, she said the country is moving in the right direction. The adjustment in the exchange rate also creates conditions for monetary policy to play a greater role in anchoring inflation. “If we now have more of the exchange-rate adjustment behind us than ahead of us, it creates the conditions for the nominal anchor for inflation to begin passing back from the exchange rate to the Kina Facility Rate,” Genia said. Bank of PNG targets stronger monetary-policy transmission Genia identified weak monetary-policy transmission as one of the major challenges facing the financial system. Changes in the KFR have not historically translated into corresponding movements in commercial lending and deposit rates, limiting the effectiveness of monetary policy in influencing economic activity. She said strengthening transmission through the KFR is therefore a critical next stage of reform. The Governor also pointed to limited competition in PNG’s banking market as another challenge. The recent entry of National Banking Corporation (NBC), TISA Bank and CreditBank is expected to increase competition for deposits and lending, although Genia cautioned that the new institutions will need time to build their businesses sustainably. Genia said BPNG is strengthening the regulatory and institutional foundations of the financial sector. Recent amendments to the Central Banking Act have strengthened the Bank’s governance while preserving its independence. Further reviews are also being undertaken of the Banks and Financial Institutions Act, the foreign-exchange regulatory framework and the National Payments System Act. The Bank is also strengthening prudential supervision and system-wide stress testing to identify risks not only within individual financial institutions but across the financial system. Operational resilience is another priority, including stronger risk management, information technology, cybersecurity and payments infrastructure. Genia said critical financial services must remain available during disruptions and that the infrastructure supporting transactions across the economy must be secure and resilient. BPNG has also introduced an Emergency Liquidity Assistance Policy, approved by its Board earlier this year, which allows the Bank to provide temporary liquidity support to an otherwise solvent and viable commercial bank experiencing severe short-term liquidity pressures. She said the policy forms part of broader contingency arrangements designed to protect confidence and financial stability. Financial inclusion expands Financial inclusion remains another major pillar of the Bank’s agenda under the National Financial Inclusion Strategy 2023–2027 and through the Centre for Excellence in Financial Inclusion (CEFI). The strategy focuses on expanding access to financial services, particularly through mobile and digital banking, with a strong focus on women and rural communities. Genia said more than 250,000 Papua New Guineans have received financial literacy training through CEFI programmes, including approximately 120,000 women. She said financial inclusion is ultimately about bringing more people into the formal financial system and enabling them to participate more fully in economic activity. PNG is also preparing to host the Alliance for Financial Inclusion (AFI) Global Policy Forum in Port Moresby, bringing together central bank governors, policymakers and financial-sector thought leaders from around the world. The forum will be held under the theme “Building Resilient Economies for an Inclusive Future”. Genia said hosting the international forum provides PNG with an opportunity to showcase its progress, strengthen regional cooperation and draw greater international attention to financial inclusion opportunities and challenges in the Pacific. Green finance emerges as new investment pathway Climate resilience and sustainable use of natural resources are also becoming increasingly important components of PNG’s financial-sector development. Genia said BPNG’s Inclusive Green Finance agenda is intended to help mobilise private and public capital towards investments that deliver environmental and economic benefits. A Green Finance Summit held in Port Moresby in May brought together government, development partners and the private sector to focus on moving green finance policy towards implementation. Four key components are being developed: the Inclusive Green Finance Taxonomy, Green Finance Academy, Environmental Risk Guidelines and Green Finance Facilities. The taxonomy is intended to provide clarity on what qualifies as green or sustainable investment, while the Green Finance Academy will build technical capacity within the sector. The Environmental Risk Guidelines will support better classification and reporting of green lending and help financial institutions incorporate environmental and climate risks into their risk-management systems. Green Finance Facilities, meanwhile, are intended to mobilise capital for commercially viable investments that support climate resilience. East Sepik project demonstrates economic value of conservation Genia highlighted the April Salumei Rainforest Community Conservation Project in East Sepik as an example of green finance being applied in practice. The project covers more than 600,000 hectares of rainforest that had originally been identified for commercial logging. Traditional landowners instead chose to preserve the forest and generate economic value through the carbon stored in the rainforest. Verified carbon credits generated through the project can be sold to entities seeking to offset emissions, with proceeds used to support community development initiatives, including schools, sustainable agriculture and employment. Under a new five-year development plan, further investment is expected in health and education. Genia said the project demonstrates how environmental assets can be protected while creating economic value and directing benefits back to the communities that own and protect those resources. AML/CFT reforms and FATF grey-list response The Governor also linked financial-sector reform to Papua New Guinea’s international financial-system obligations. PNG is currently responding to its placement on the Financial Action Task Force (FATF) grey list, with a review of the Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) Act forming part of the national reform programme. Genia said the focus is on implementing the agreed action plan, strengthening the effectiveness of PNG’s AML/CFT framework and demonstrating progress. For BPNG, she said the reforms are directly connected to maintaining the integrity of the domestic financial system and confidence in PNG’s links with the international financial system. BPNG is also pursuing reforms to the national payments system as financial technology and payment platforms continue to evolve. Genia said domestic and international payment systems must remain interoperable, secure and capable of accommodating new technologies. For PNG’s domestic market, she said financial institutions must be able to transact effectively with one another and the country’s national payments infrastructure must keep pace with developments in the wider payments ecosystem. Genia stressed that financial-sector reform would not produce results overnight. “Financial sector reform is not one single switch. It involves a series of measures that take time to take effect and, above all, require stability if they are to deliver meaningful results,” she said. For investors and businesses, the reform agenda points to a financial system intended to provide greater stability, stronger competition, improved access to finance and more effective monetary-policy transmission, while creating new opportunities in digital banking, green investment and the broader non-resource economy.

Tolu Minerals Limited (TML) has recorded a significant improvement in its underground operations following a notable increase in production under new Underground Leadership at the Tolukuma site. The improved performance reflects the continued commitment, teamwork and dedication of the underground workforce, whose efforts have contributed to significant progress across the operation. To recognize and celebrate the Underground team’s achievements, TML held a special “Rockstar BBQ” at the Tolukuma site, bringing employees together to acknowledge the hard work behind the operation’s recent performance. iPi Catering provided catering for the celebration, including a BBQ and refreshments for the Underground team. The event was well received by employees, with positive feedback on the quality of the food and the professionalism of the catering team. The Integrated Site Service Manager commended the iPi Catering team for its contribution, particularly its effort and professionalism in supporting the workforce. “From VIP breakfast in the morning to the BBQ provided for the Underground team in the evening, the energy, effort, dedication, and professionalism shown by everyone was greatly appreciated. “The UG miners were absolutely over the moon with the spread provided for them. They were genuinely thankful and I witnessed firsthand their delight and the smiles on their faces. It was great to see how much they appreciated the effort that had gone into making the BBQ a special occasion for them.” TML also acknowledged iPi Catering for its contribution to the event and for its continued provision of quality food, professional service and support to the Tolukuma workforce. The achievement marks an encouraging milestone for the Tolukuma operation as the team continues to focus on maintaining strong performance, teamwork, safety and operational excellence. Tolu Minerals Limited is committed to responsible mining operations and supporting the development of its people, operations and surrounding communities. iPi Catering is part of the iPi Group and provides catering and food-service solutions for corporate, industrial and remote-site operations. The business is committed to delivering quality food and reliable catering services tailored to the needs of its clients.

Papua New Guinea has signed a revised Papua LNG Project Agreement aimed at strengthening the project’s commercial viability while protecting the State’s long-term fiscal interests, with a firm deadline now set for a Final Investment Decision (FID) by 15 December 2026. Petroleum Minister Jimmy Maladina said the revised agreement follows detailed negotiations between the Government and Papua LNG project participants and provides a targeted fiscal support mechanism designed to address weaker market conditions without permanently reducing the State’s overall fiscal take. “This is a balanced transaction, not a giveaway,” Maladina said. “The arrangement recognises the commercial realities facing a project of this scale while ensuring Papua New Guinea retains appropriate protection and participates in the upside when market conditions are stronger.” The fiscal mechanism is temporary, reciprocal and capped, with safeguards intended to protect government revenues over the longer term. Royalty and development levy payments to landowners, provincial governments and local-level governments will remain protected under the revised arrangements. A key component of the negotiated package is an option for a State nominee to acquire an additional 2.5 per cent interest in Papua LNG, on top of the State’s existing entitlement under Section 165 of the Oil and Gas Act. The associated PNG LNG arrangements will also provide an improved wellhead-value basis for calculating royalty and development levy payments, potentially strengthening the revenue base for government and project-area stakeholders. The package further includes cheaper gas for domestic electricity generation and free gas to generate up to one megawatt of discounted electricity for landowner communities in and around Caution Bay. The Government views Papua LNG as a major investment capable of generating construction and operational employment, contracts for local businesses, infrastructure development and substantial future government revenue. For Papua New Guinea’s private sector, a move into development would create opportunities across construction, logistics, transport, accommodation, catering, engineering, security and other supporting services. Maladina said the Government’s objective during negotiations was to establish a commercially viable pathway to development while maintaining safeguards for the State. “Papua LNG represents a major investment in Papua New Guinea. It has the potential to generate employment, business opportunities, infrastructure investment and substantial future government revenue,” he said. FID deadline The revised arrangements are conditional on Papua LNG achieving an affirmative FID by 15 December 2026. Maladina described the date as a “drop-dead deadline”, signalling that the negotiated fiscal arrangements are intended to secure a firm investment commitment rather than provide an open-ended concession. “The State has provided this negotiated pathway for one clear purpose: to secure a firm investment commitment and move Papua LNG into development,” he said. The signing now shifts attention to the project participants and the remaining work required to reach FID. If achieved, the decision would mark a significant step towards construction and development of another major gas investment in PNG, with potential flow-on impacts for government revenues, employment, local contracting and infrastructure spending. For the Government, the immediate priority is therefore to convert the revised agreement into a firm investment decision by the December deadline while ensuring the State and affected communities retain an appropriate share of the project’s long-term economic benefits.

Reeves Envico and CE Group have commenced work on the 22-kilometre transmission line that will connect renewable energy from Tina River with the homes, businesses and essential services of Honiara. Against the rolling hills and demanding terrain of Guadalcanal, work is beginning on a connection that will carry more than electricity. The new transmission line will extend 22 kilometres from the Tina River Hydropower Facility to Lungga Power Station and the Honiara national electricity grid. Once complete, it will carry up to 15 megawatts of renewable power to the capital, helping reduce reliance on imported diesel and supporting cleaner, more reliable and more affordable energy for Solomon Islanders. The commencement of construction was marked at a signing ceremony in Honiara attended by representatives of the Solomon Islands Government, Solomon Power, Australia, Reeves Envico and CE Group. The ceremony recognised a significant step forward for the Tina River Hydropower Development Project-the largest renewable energy initiative undertaken in Solomon Islands. Reeves Envico is delivering the transmission line works as principal contractor, with CE Group engaged as the Electrical Infrastructure Partner. The relationship brings together Reeves Envico’s longstanding connection with Solomon Islands and CE Group’s experience delivering complex electrical works in remote and operationally challenging environments. The scale of the undertaking is significant. The route crosses rolling hills, changing elevations and areas where weather, access and terrain will influence the movement of workers, equipment and materials. Delivering the line will require disciplined planning, technical capability and close coordination with Solomon Power, national workers, communities and the broader project team. It is a demanding scope, but its purpose is deeply human. Reliable electricity supports hospitals, classrooms, communications, refrigeration, government services and local businesses. Its value is felt when essential equipment continues operating, when a student can study and when a business can remain productive. For Reeves Envico and CE Group, those everyday outcomes give the partnership its meaning. Reeves Envico Managing Director Simon Gorman said the signing marked a deeply significant return to the country where the company’s story began. “Reeves’ connection with Solomon Islands began in 1988, with our very first project. To return today and sign this contract is more than an important milestone-it is a privilege,” Gorman said. That history brings both experience and responsibility. The partnership between Reeves Envico and CE Group is grounded in trust, integrity and a shared commitment to deliver work that supports Solomon Islands’ national priorities. For CE Group, the project is its largest contract to date and an opportunity to apply its electrical engineering and construction capability to work of lasting national value. CE Group Managing Director Ryan Johnson said the signing reflected the strength of the relationships that continue to connect Solomon Islands and Australia. “Today’s signing honours that enduring partnership and opens the door to new opportunities for the people of both our nations," Johnson said. Those opportunities extend beyond the physical delivery of the transmission line. More than 190 Solomon Islanders are currently employed across the broader Tina River Hydropower Development Project, with further opportunities expected as construction progresses. Behind that number are workers developing experience, families supported by employment and national capability that will remain beyond the construction period. The wider project also includes education and training initiatives and measures supporting safe employment opportunities for women and girls. Australia is contributing approximately SBD$180 million to the transmission line project through the Australian Infrastructure Financing Facility for the Pacific, combining concessional financing and grant funding. The project is expected to be completed in early 2028. Its magnitude can be measured in kilometres, megawatts and the difficulty of the landscape. Its true legacy, however, will be measured by what it enables: stronger energy security, more dependable essential services, national employment and new possibilities for Solomon Islands communities. For Reeves Envico and CE Group, the intention is clear: to honour the trust placed in the partnership, deliver with integrity and remain focused on the people the work is ultimately intended to serve. The signing ceremony marked the beginning of that responsibility-not its conclusion. The lasting measure of the partnership will be found in the work delivered, the relationships strengthened and the benefits carried forward for Solomon Islands. Beyond borders, progress is built through partnership.

Government agencies, humanitarian organizations and development partners have reviewed and endorsed proposed actions under Papua New Guinea’s El Niño Plan of Action for Agricultural Drought 2026-27, as the country prepares for potentially worsening climate-related impacts on food production and rural livelihoods. The national consultation workshop was convened by the PNG Food Security Cluster, which is co-chaired by the Department of Agriculture and Livestock (DAL) and the Food and Agriculture Organization of the United Nations (FAO). The consultation comes after the National Weather Service declared El Niño conditions in June, with forecasts indicating that the weather pattern could persist or intensify through the latter part of 2026 and into 2027. Participants reviewed proposed interventions across four phases of the plan — preparedness, anticipatory action, response and recovery — with discussions focused on ensuring measures are practical, coordinated and responsive to local needs and vulnerabilities. Stakeholders also identified priority activities, assessed implementation capacities and discussed coordination mechanisms to enable timely action before drought conditions worsen. The workshop also sought to clarify the roles and responsibilities of participating organizations, identify resource and funding gaps, and strengthen collaboration among government, humanitarian and development partners. DAL Secretary and Food Security Cluster co-chair Dr Sergie Bang said strategic action was needed to strengthen the country’s resilience to recurring droughts. “We have to take strategic agricultural actions because we can expect these droughts to come again,” Bang said. “We need to integrate irrigation and mechanization into our production systems and strengthen our cropping systems so that we place our country and our population in a better food-secure situation,” he said. A key outcome of the consultation was a commitment by Food Security Cluster partners to strengthen preparedness and coordination while refining the drought Action Plan for implementation at national, provincial, district and community levels. The process is expected to produce a set of priority actions, map partner roles and capacities, and establish a framework for monitoring implementation progress. The measures are aimed at safeguarding agricultural production and rural livelihoods while strengthening food security in communities vulnerable to prolonged drought and frost conditions. More than 80% of Papua New Guinea’s population relies on agriculture, livestock and fisheries for food and income, making early planning and coordinated intervention critical to limiting the effects of climate-related shocks. The workshop brought together representatives from government agencies, UN agencies, development partners including Australia’s Department of Foreign Affairs and Trade and New Zealand’s Ministry of Foreign Affairs and Trade, non-governmental organizations, civil society and faith-based organizations, as well as technical and humanitarian partners. The consultation forms part of broader efforts to translate early warning information into early action and strengthen the resilience of PNG’s agriculture sector as climate risks increase.

The Centre for Excellence in Financial Inclusion (CEFI) and Credit Guarantee Corporation PNG (CGC) have signed a memorandum of understanding to strengthen financial literacy, business capability and access to finance for micro, small and medium-sized enterprises across Papua New Guinea. The agreement formalizes an existing partnership between the two organisations and establishes a framework for joint financial literacy programmes, entrepreneurship training, business development support and referrals to financial institutions participating in CGC’s credit guarantee programme. CEFI and CGC will collaborate on financial literacy and capacity-building initiatives covering entrepreneurship, banking and financial management, while raising awareness of their respective roles in expanding access to finance and financial inclusion. A key element of the partnership will be a referral pathway for startup businesses seeking finance. CEFI Acting Executive Director Peter Samuel said the growing number of MSMEs accessing financial services made it important to ensure business owners had the skills to manage their finances effectively. “As CGC’s portfolio continues to grow, so too does the number of MSMEs participating in the market,” Samuel said. He said greater access to finance did not necessarily mean that beneficiaries had the knowledge required to manage their businesses successfully. “Our objective is to ensure that recipients of guaranteed facilities are equipped with the knowledge and skills needed to manage their businesses effectively, maintain proper financial records and avoid the risks associated with poor financial management,” he said. Samuel said CEFI would complement CGC’s credit guarantee facilities with practical capacity-building programmes, including its Business Essential Skills Module, Digital Financial Literacy Module and financial literacy programmes covering budgeting and savings. He said combining access to finance with business incubation and financial education would provide entrepreneurs with stronger support to establish sustainable businesses. “The government continues to emphasise the importance of supporting MSMEs. However, support must go beyond financing alone,” Samuel said. “We also need clear pathways that provide incubation, capacity building and business acceleration programmes to help MSMEs become sustainable and contribute meaningfully to economic growth.” CGC Chief Executive Officer Dominic Sikakau said the agreement formalised a partnership that had already supported several initiatives. “We have already collaborated on a range of initiatives, so today’s memorandum of understanding simply formalises a relationship that has existed for quite some time,” Sikakau said. He said loan defaults remained a key challenge for CGC’s guarantee programme and were often linked to gaps in business knowledge and financial management skills. “Through our partnership with CEFI, we hope to strengthen the capacity of MSMEs by equipping them with the knowledge and skills to manage their finances effectively, build sustainable businesses and ultimately reduce the risk of default,” he said. Sikakau also highlighted CGC’s Loan Referral Platform, which allows MSMEs to submit loan applications online to participating financial institutions. He said integrating the platform into CEFI’s financial literacy programmes could improve awareness and accessibility, particularly among entrepreneurs in rural and remote areas. The organisations said the partnership would help create stronger pathways for entrepreneurs, reduce barriers to finance and support private-sector growth, financial inclusion and socioeconomic development in Papua New Guinea.

The return of the Malagan Festival to Kavieng after more than 30 years is creating a platform for local businesses, producers and communities to showcase products while strengthening New Ireland’s cultural tourism potential. The three-day provincial festival, held under the theme “Stronim Pasin Tumbuna! Strongim Pasin Niu Aila”, brings together communities from across New Ireland for traditional rituals, dances, music, arts and crafts, food, cultural exhibitions and an agricultural show. The festival opened with a colourful Kinavai ceremony at the Kavieng beachfront, where communities and visitors welcomed New Ireland Governor Byron Chan before activities moved to the Kopkop Showground. Governor Chan said the revival of the festival was significant, as the Malagan Festival had previously been one of New Ireland’s major cultural events before disappearing for more than three decades. “The festival provides an important opportunity for New Ireland communities to come together and celebrate the customs, traditions and traditional knowledge systems that have shaped the province’s identity,” Chan said. From a business perspective, the festival is providing local entrepreneurs and community groups with an opportunity to sell and promote traditional arts and crafts, cultural products, local food and other locally produced goods. Business houses are also participating through exhibitions, while cultural groups and choirs are contributing to the three-day programme, attracting visitors from within and outside the province. The revival comes as New Ireland continues to position its unique cultural heritage as an asset for tourism and local economic activity. Increased visitor participation in cultural events can create opportunities for accommodation providers, transport operators, food vendors, handicraft producers and other small businesses. The festival also incorporates an agricultural show, providing producers with an avenue to display local agricultural products and potentially connect with markets and customers. A major announcement during the festival was the decision to establish a monument honouring the late Grand Chief Sir Julius Chan, founding father of New Ireland and former Prime Minister of Papua New Guinea. Chan said the statue would be erected within the Provincial Assembly precinct as a permanent tribute to Sir Julius Chan’s contribution to New Ireland and the nation. “The statue will be erected at the Provincial Assembly precinct as a permanent tribute to his contribution to the province and the nation,” he said. The Malagan Festival continues through Saturday, with further cultural presentations and community activities planned. Meanwhile, the official launch of the Sir Julius Chan Foundation is scheduled for Saturday at the Chan family residence at Huris in Namatanai District. The festival’s return marks not only a cultural revival for New Ireland but also an opportunity to strengthen community-based enterprise and develop cultural tourism as part of the province’s broader economic potential.

Resources and/or Reserves The words resources and reserves as applied to the presence of oil and gas deposits are often quite casually used without due regard for their actual meaning. This can clearly mislead people either by grossly exaggerating, or under-estimating the importance of an undrilled prospect, the potential oil and gas production of a field, or even the actual petroleum endowment of a nation. The latter can in turn lead to very serious economic policy errors by a government. A country may be prospective for petroleum accumulations, but being prospective is only a statement of there being the potential for oil and gas to have accumulated into discrete subterranean pools, or accumulations, which may have the potential to be tapped by wells drilled into them. These accumulations have to be found first by field exploration and the drilling of wells, which are not easy tasks. Discovered accumulations then have to be evaluated for the quality of the petroleum that they bear and their extent, and only if they are large enough, might they be considered for commercial recovery of that discovered petroleum. In this discussion, I only discuss conventional oil and gas accumulated in porous and permeable reservoirs, not oil and gas unlocked from less permeable strata by fracturing or gas released from degasification of coal – coal bed methane.      Figure 1: Section through rock strata illustrating subsurface sources of oil and gas, after U.S. Energy Information Administration. Discovery Exactly what constitutes a discovery can be debated for hours by petroleum technocrats.   The Society of Petroleum Engineers defines a discovery as being a “petroleum accumulation where one or several exploratory wells through testing, sampling, and/or logging have demonstrated the existence of a significant quantity of potentially recoverable hydrocarbons and thus have established a known accumulation.” In this context, recoverable means that the hydrocarbons have to demonstrate that they are indeed moveable and are not just immovable residues.  A significant quantity implies that there is evidence of a sufficient quantity of petroleum to justify estimating the in-place volume of petroleum as demonstrated by the drilling of wells into the accumulation and for evaluating the potential for future commercial recovery of that petroleum. One should be cautious in the use of the term discovery. Discovery should not be translated into undue expectations of oil and gas field development and petroleum incomes.  Development of any oil and/or gas accumulations only comes as and when there are proven to be adequate recoverable oil and/or gas reserves to warrant the expense and effort of development and production operations. Discovery is the first elemental step towards development, but it is only the initial identification of the accumulation of petroleum, the scope and dimensions of which has to be subsequently ascertained. Interestingly enough, the Papua New Guinea Oil and Gas Act does not define discovery, though it does require the discovery of petroleum to be notified to the Government immediately and details of the same to be provided within three days. The licensee may then be directed to furnish “written particulars of the chemical composition and physical properties of the petroleum; and the subsoil in which the petroleum occurs; and any other pertinent matters.” Typically, the acid test of a discovery has been the testing of the discovery well to see if the petroleum will flow from the subsurface reservoir to the surface, though modern downhole tools can simulate such tests and provide a reasonable understanding of the petroleum content of the discovered accumulation and the ability of its reservoir to permit the flow of its contained fluids.     Figure 2: Testing of the Pasca A-4 well in the Gulf of Papua in 2019, after Twinza Oil Ltd. The evaluation of the results of an exploration well needs to be done most carefully. Full attention to the monitoring of the petroleum operations is essential to preserve the interests of the nation, not that the petroleum companies might mislead the government, but errors of interpretation and judgement do occur.  In one famous case in Papua New Guinea, a well-known operating petroleum company thought that it had made an oil and gas discovery. In an effort to keep up with its fiduciary duties to its shareholders and its Australian Stock Exchange listing requirements, it issued a press release announcing that it had made a significant oil and gas discovery of considerable thickness with well logs showing a gas cap overlying a respectable oil column. The company’s development geologist courteously delivered a copy of the press release to the author at the Government’s Petroleum Division at the Department of Petroleum and Energy together with a set of the well logs (which necessarily excited the author). After ten minutes of cursory review of the logs, the author announced to the company’s development geologist that the company had not discovered any oil or gas, but that the well had rather encountered reservoirs full of water. The press release was suitably endorsed and sent back to the company’s managing director, who was stunned in disbelief.  The company proceeded to evaluate the well the next morning with a full well test of the various supposed hydrocarbon-bearing reservoirs, but the well tests flowed only water. Such was not only a grave disappointment and embarrassment to the company, but also to the Government which naturally would have preferred a discovery.   A Field In conventional petroleum reservoirs, a field is typically an area consisting of a single accumulation or multiple accumulations in a reservoir or reservoirs all grouped on, or related to, the same individual geological structural feature and/or stratigraphic condition. There may be two or more reservoirs in a field that are separated vertically by intervening impermeable rock, laterally by local geologic barriers, or both. Aside from accumulation and reservoir, some jurisdictions use the term pool. In Papua New Guinea, a petroleum pool is defined as a “naturally occurring discrete accumulation of petroleum.”   Figure 3: Map of the Kutubu oil and gas fields: Iagifu-Hedinia, Agogo and Usano, after Oil Search Ltd.       Poor Advice Can be Misleading In one developing country, its foreign expert oil and gas advisers told the government that it had one billion barrels of crude oil. However, that estimate was only an assessment of the overall potential petroleum endowment of the country, if it might be realised through appropriate exploration and discovery. It was a probabilistic estimate based on an assessment of regional geological parameters that are conducive to the formation of petroleum accumulations. It was obviously dependent on the results of exploration which might, or might not take place. Moreover, the advice failed to define whether that was the amount of oil and gas that might be found in situ within the yet-to-be-discovered accumulations, or whether it would be the amount of oil and gas that might be recoverable, either technically or economically. Alas oil, as we all know, is viscous and sticky, and does not flow easily. It also requires energy to flow to the surface, so only a proportion of all subterranean oil discovered is ever recovered. That estimate of the country’s oil endowment also only had a 50% probability. Subsequent exploration by oil and gas companies found just several accumulations of crude oil amounting to an aggregate 200 million barrels of oil-in-place. Oil-in-place is the petroleum that exists originally in naturally occurring accumulations, discovered and undiscovered, before production begins. However, the discovered oil was of high viscosity and density, and only 9% was found to be actually recoverable and potentially able to yield 18 million barrels of actual oil production for sale and use. Politically, the President of the country had staked his national policies on the cited one billion barrels by multiplying that quantity by the then current price of crude oil of US$ 50 per barrel. Thus, he contemplated having a massive US$ 50 billion contribution to the nation’s economy, and maintaining his popularity and position based on such. He told the people that the country would become a member of OPEC and everyone would have cheap gasoline and diesel. However, the reality was that the discovered recoverable 18 million barrels was quite difficult to win from the ground and the development and operating costs amounted to US$ 30 per barrel, leading to a net value of subsequent oil production being only US$ 20 per barrel for a total value of just US$ 360 million. The President then realised that the Government’s Production Sharing Contract more or less allowed the oil companies to keep 50% of the net value of the produced crude, so his government got just US$ 180 million. And this was spread out over twenty years providing an average income to the Government of just U$ 9 million per year, a far cry from the spectacular windfall of US$ 50 billion. The President was accused of misleading the people and was not re-elected in subsequent national elections. There is no need for such grave errors. It is the duty of the petroleum technocrat, specialist or expert, be he or she: an adviser, a government official, or a company official to advise non-technical people appropriately, and with great caution. Politicians and others have their expertise, and we petroleum folks have ours; it is our job to communicate our findings to others with professional care and diligence. In one West African nation, the author once had to tell the President’s Adviser that she was not qualified to talk about the potential oil reserves that some international company had been promoting to her boss, making the President overly exuberant and excited about future oil production. She was alarmed and annoyed when told that the country had no petroleum reserves, but only prospective petroleum resources that had yet to be discovered, may be. Some ten years later, those wells have yet to be drilled, and the country still has no proven oil reserves. On another occasion in Papua New Guinea, when Chairing the Opening Ceremony of the Second PNG Petroleum Convention in May 1993, the author had to carefully and cautiously advise the then Prime Minister, the Rt. Hon. Paius Wingti, PC (next to whom, the author was sitting) that the enormous Indonesian gas reserve figures being talked about by our guest keynote speaker, Ir. Suyitno Patmosukismo, the then Director General of Indonesia’s Ditjen MIGAS, (an abbreviation for Minyak dan Gas Bumi, or Oil and Gas, and the State regulator of oil and gas) were not actual proven recoverable volumes of gas, but probabilistic estimates of potential undiscovered resources.  This put our modest, but conservatively estimated proven recoverable gas resource identified by that time in perspective, and we felt less humbled! The Prime Minister was grateful, and the author had done his duty.   Figure 4: Extract from the Programme of the Second PNG Petroleum Convention, May 1993 The mainstream media (newspapers, television and radio) often make mistakes in talking and writing about oil and gas resources and reserves, often needing specialist technical correction after promoting public misunderstanding. Sensational news sells better, one supposes.  I shall not dwell on the many inaccuracies of social media in these matters. Within the petroleum industry, we may also sometimes find speculation, especially by smaller oil and gas exploration companies that wish to talk up the petroleum resource potential of their exploration areas. Often this is done to make investment in their company seem more attractive. Whilst the larger integrated international oil and gas companies do not need to play such games, there are times when they might exaggerate the potential of undrilled leads and prospects to the non-technical minds of political leaders in an attempt to persuade them to consider favourable treatment and regulatory actions.   Petroleum Resources Management System The petroleum industry has rules about such matters. The systematic reporting of petroleum resources has been developed progressively over nearly one hundred years.  Today, the Petroleum Resources Management System (PRMS) is highly developed, and subject to regular revision and update. It is published by the Society of Petroleum Engineers, and its Oil and Gas Reserves Committee. It has wide industry input and sponsorship from other industry organisations, such as the World Petroleum Council (WPC), and the American Association of Petroleum Geologists (AAPG), among others. The PRMS provides a consistent approach to estimating petroleum quantities, evaluating projects, and presenting results within a comprehensive classification framework.   Petroleum First of all, we need to be sure of what we are talking about.  Petroleum is defined as a naturally occurring mixture consisting of hydrocarbons in the gaseous, liquid, and or solid state. Petroleum may also contain non-hydrocarbons, common examples of which are carbon dioxide, nitrogen, hydrogen sulphide, and sulphur, and in rare cases, non-hydrocarbon content can be greater than 50%. Interestingly enough, in Papua New Guinea, although the definition of petroleum is more or less the same, the Oil and Gas Act simultaneously refers to helium alongside petroleum.  Helium was found in both the Barikewa 1 and Iehi 1 wells drilled respectively in 1958 and 1960 by Island Exploration Company and the Australasian Petroleum Company. Albeit in relatively low concentration of only about 0.1% in the discovered natural gas stream, it may one day yet have commercial value if the gas from these fields is ever produced for LNG production.   Petroleum Resources The term petroleum resources is used to encompass all quantities of petroleum both recoverable and unrecoverable naturally occurring in an accumulation on or within the Earth’s crust, discovered and undiscovered, plus those quantities already produced. Further, it includes all types of petroleum whether currently considered conventional or unconventional.   Petroleum Reserves Petroleum reserves are those quantities of petroleum anticipated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions. Reserves must satisfy four criteria. They must be discovered, recoverable, commercial, and remaining (as of the evaluation’s effective date) based on the development project(s) applied. Reserves are recommended as sales quantities as metered at the reference point. Where the entity also recognises quantities consumed in operations as reserves these quantities must be recorded separately. Non-hydrocarbon quantities are recognized as reserves only when sold together with hydrocarbons or volume consumed in operations associated with petroleum production. If the non-hydrocarbon is separated before sales, it is excluded from reserves. Reserves are further categorized in accordance with the range of uncertainty and should be sub-classified based on project maturity and/or characterised by development and production status. The PRMS summarises this in its Resource Classification Framework. The horizontal axis reflects the range of uncertainty of estimated quantities potentially recoverable from an accumulation by a project, while the vertical axis represents the chance of commerciality, which is the chance that a project will be committed for development and reach commercial producing status.   Figure 5: Resources Classification Framework, after the Petroleum Resources Management System (PRMS) of the Society of Petroleum Engineers.   Proved, Possible and Probable Reserves In dealing with uncertainty of petroleum reserves, the PRMS classically uses the terms: proved, probable and possible.   Proved reserves are those quantities of petroleum that, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable from known reservoirs and under defined technical and commercial conditions. If deterministic methods are used, the term “reasonable certainty” is intended to express a high degree of confidence that the quantities will be recovered. If probabilistic methods are used, there should be at least a 90% probability that the quantities actually recovered will equal or exceed the estimate. Probable reserves are those additional reserves which analysis of geoscience and engineering data indicate are less likely to be recovered than Proved Reserves, but more certain to be recovered than Possible Reserves. It is equally likely that actual remaining quantities recovered will be greater than or less than the sum of the estimated Proved plus Probable Reserves (2P). In this context, when probabilistic methods are used, there should be at least a 50% probability that the actual quantities recovered will equal or exceed the 2P estimate. Possible reserves are those additional Reserves that analysis of geoscience and engineering data suggest are less likely to be recoverable than Probable Reserves. The total quantities ultimately recovered from the project have a low probability to exceed the sum of Proved plus Probable plus Possible (3P) Reserves, which is equivalent to the high-estimate scenario. When probabilistic methods are used, there should be at least a 10% probability that the actual quantities recovered will equal or exceed the 3P estimate. Of course, to be presented as a reserve the petroleum in question has to be discovered, recoverable, commercial, and remaining to be recovered based on a scheme of development to be applied. Where petroleum accumulations fall short of these criteria, they are generally considered to be contingent resources.    Commerciality Discovered recoverable quantities of petroleum or contingent resources may be considered commercially mature, and thus attain reserves classification, if the entity claiming commerciality has demonstrated a firm intention to proceed with development. This means the entity has satisfied its internal decision criteria. This is typically the rate of return at or above the weighted average cost-of-capital or the hurdle rate. Commerciality is achieved with the entity’s commitment to the project and all of the following criteria: Evidence of a technically mature, feasible development plan. Evidence of financial appropriations either being in place or having a high likelihood of being secured to implement the project. Evidence to support a reasonable time-frame for development. A reasonable assessment that the development projects will have positive economics and meet defined investment and operating criteria A reasonable expectation that there will be a market for forecast sales quantities of the production required to justify development. There should also be similar confidence that all produced streams (e.g., oil, gas, water, CO2) can be sold, stored, re-injected, or otherwise appropriately disposed. Evidence that the necessary production and transportation facilities are available or can be made available. Evidence that legal, contractual, environmental, regulatory, and government approvals are in place or will be forthcoming, together with resolving any social and economic concerns. One might consider the current status of the Elk-Antelope gas field which is to be developed for production gas as feedstock for processing as liquefied natural gas (LNG) by the renowned international oil and gas company, TotalEnergies. In the context of the PRMS, the petroleum of the Elk-Antelope gas field is on the brink of becoming commercial, and thence considered as petroleum reserves. The PRMS nicely demonstrates the transition of contingent resources where development is pending to reserves justified for development and then approved for development. The fields currently contributing gas to the PNG LNG Project clearly have proved reserves which are either currently being produced or are to be produced.  As such fields continue to produce gas their proved reserves are systematically depleted by that production. We term production as the total cumulative quantity of petroleum that has been recovered at a given date. Proved reserves may be replenished as the operating company obtains more and more information about the petroleum accumulation it is producing and their reservoirs.  Reserves which previously had less certainty of recovery may migrate from the possible reserve category to the probable reserve category and likewise from the probable category to the proved category.  This is not a certainty, but the phenomenon of reserve creep is often realised as production continues, reservoir knowledge and understanding of its behaviour are amassed and field experience expands, but not always. There can be equally disappointing outcomes.   Figure 6:  Sub-classes of petroleum based on project maturity, after the Petroleum Resources Management System (PRMS) of the Society of Petroleum Engineers.     Plays, Leads, and Prospects Oil companies will talk of checking out a play. A play is a geological argument used to justify exploration for hydrocarbons. Critical geological ingredients may be present in an area that may encourage the notion that petroleum accumulations might have formed within the subterranean strata.  A sedimentary basin may have developed sometime in geological history within the strata of which buried organic material may have matured into oil and gas. The petroleum geologist will have ideas of possible trapping mechanisms which may have caused any generated petroleum to have accumulated in geological traps which would necessarily have to be formed before the petroleum migrated due to its buoyancy.      Geological, geophysical and geochemical are undertaken to identify potential structural trends which may provide potential traps. These are often called leads.  When such leads are examined more closely to ascertain that they meet all the criteria for formation of a petroleum accumulation, prospects may emerge which may be worthy of drilling to determine whether there might be a petroleum accumulation worthy of commercial production. Oil companies will drill their best and largest prospects with the hope of finding oil and gas. Alas, all parameters for the formation of an accumulation have to be present and with the correct timing, so often drilling is not successful. Subtleties of geological history and evolution of the geology of the area may preclude the prospect from bearing hydrocarbons. Sometimes perseverance is required as the drilling of several prospects provides more specific geological knowledge of the area, and eventually a discovery is made. There are so many cases where companies have drilled a series of well unsuccessfully, only to have a pleasant surprise eventually with a late discovery.    Figure 7: Plays, leads and prospects, after Sabrine Berkat, ALNAFT, Algeria.       Appraisal Once a discovery is made, the question everyone asks is, “How big is it?” This is a simple, but daunting question.  A typical petroleum prospect in Papua New Guinea might need to be of considerable size to justify and warrant it being drilled in the first place. Take for example, the Iagifu prospect of the Iagifu-Hedinia oil field, in production since 1992 as part of the Kutubu Project. Its pre-drill prospect structure was approximate 6 kms long by 3 kms wide, and ellipsoidal in shape covering an area of about 56.5 square kilometres.  Consider that the drill bit that first entered the oil-bearing Toro Sandstone reservoir at 2,430 metres depth in the well was just 12-1/4 inches in diameter, or only 0.076 square metres or 760 square centimetres in area. That bit probed only just over five billionth parts of the prospect, a minute portion of the prospect indeed. A discovery is nice, but it does not make a field. Sometimes there is not even a defined accumulation, if the discovery cannot be delineated or appraised by further drilling to map out the lateral extent of the accumulation across the geological structure which formed the prospect. There was an extraordinary discovery called Makas 1-X, which was drilled in the 1990s and which allegedly found an oil-bearing sandstone. The well ran into technical difficulties and had to be re-drilled, but when that new well encountered the reservoir sandstone, it was barren of oil. In this instance, appraisal refuted the supposed discovery. Appraisal seeks to probe the full extent of a newly-discovered petroleum accumulation by the drilling of more wells into the prospect. This is done to gauge whether the accumulation contains enough petroleum to be able to sustain production on a profitable commercial basis. It is an important critical stage of petroleum development. The drilling of further wells on a discovery has to be encouraged and promoted, and if necessary, government regulators need to ensure it takes place.    Figure 8: An early post-discovery depth map of the top of the oil-bearing Toro Sandstone reservoir over the Iagifu and Hedinia anticline, after Paul Lamerson, Chevron, 1988.     The operating petroleum company may not wish to spend precious financial resources on appraisal immediately. It may have other competing or urgent investments.   The Papua New Guinea legislation does not define the term appraisal of a discovery, but appraisal of a petroleum discovery is included in the rights of petroleum prospecting licensee. However, the government may direct the licensee to do such things as are thought necessary including the completion of wells, the conduct of drill stem or extended production tests for appraisal of a discovered petroleum accumulation. More specific appraisal requirements are contained either in legislation, licence conditions or production sharing agreements elsewhere.  The Papua New Guinea Oil and Gas Act does enable the declaration of what is known as a Location over the specific block within which a discovery is made, and up to eight adjoining blocks (a block is 5 minutes latitude by 5 minutes longitude, or about 81 square kilometres at the latitudes of Papua New Guinea). The declaration of a Location enables some degree of retention of the licence area by the discoverer, but also importantly triggers the ability of the Government to  require various investigations and studies as to assess the feasibility of the construction, establishment and operation of an industry for the recovery of petroleum from the location, particularly technical and economic feasibility studies relating to the recovery and transport of petroleum from the location and processing of the petroleum.   Estimating the Resources Once a petroleum accumulation has been found and appraised by the drilling of further wells which have shown that the petroleum can flow to the surface, the next big question is the size of the accumulation. Essentially, size of the accumulation it is a matter of size of the reservoir, and that in turn depends on the size of the geological structure that may have formed the trap within which the petroleum got trapped and has been found. Quite simply, the more petroleum bearing rock there is, the more petroleum will be in-place; we call this the bulk rock volume.  In simple terms, this is the area of the reservoir times its thickness, though complexities of the geological structure and its shape make this considerably more complicated.  Now, we must remember that in a conventional petroleum reservoir, the petroleum is located in the pores within the rock, a bit like water in a sponge. So, determining the porosity of the reservoir rock is a fundamental factor that has to be measured. A sample of rock can be obtained from the well and physical studies can be made of it to ascertain its porosity as a percentage of the rock, or electronic tools can be lowered into the well to measure physical properties of the rock from which its porosity may be calculated. Within the subsurface rock strata, water abounds, remnant from the time of deposition. When petroleum accumulates in a porous reservoir rock it, displaces the water, but not perfectly or completely. There is always some water left behind. Accordingly, a portion of the porosity of the rock still contains water depending on local subsurface geological condition.  Again, measurements can be made of the reservoir rock in situ by special electronic tools to ascertain what percentage of the pores is filled with water, and what percentage is filled with petroleum.  This, we call the water saturation. When petroleum flows to the surface from a reservoir, it is moving from a location of high pressure and somewhat elevated temperature to standard atmospheric conditions. Oil containing gas will shrink as it rises up the well to ambient conditions as the gas comes out of solution. There is also some shrinkage due to temperature change effects and expansion due to pressure relief.  This volume change is called the shrinkage and is expressed as the formation volume factor, the ratio of the volume of petroleum at reservoir conditions to the volume at surface conditions. It typically ranges from 1.0 to 3.0.  In the case of gas, as it flows up the well, it will expand in classic response to the decrease in pressure and temperature from subsurface reservoir conditions to surface conditions.  The gas formation volume factor is generally much lower, ranging from 0.001 to 0.01 reservoir volume per surface volume. Multiplying these factors together, in broad terms, we get: Volume of petroleum at surface = bulk rock volume x porosity x (1-water saturation)/formation volume factor      This is what we call a volumetric method, which is adequate in cases where we have some idea of rock and fluid parameters. It is generally used in early stages of appraisal of an accumulation.  Other methods are the material balance method in which the tracking of pressure changes is used to estimate remaining reserves, and decline curve analysis, which uses field production data trends to predict future output. Of course, this discussion is quite generalised, and there are many intricacies and additional dependencies.   Figure 9: Classical methods of petroleum reserve analysis after petroleum concepts on Instagram Petroleum is normally a complex mixture of many different hydrocarbons. Oil most often contains hydrocarbon gases in solution and natural gases contain liquid hydrocarbons in solution. Also, rarely are reservoirs undisturbed and quite often the very tectonic forces that created the geological structure within which the petroleum has been trapped may cause intricate faulting of that reservoir. This can often spoil the continuity of the reservoir and effectively break it up into many small pieces of reservoir some of which may not have been able to be charged with oil or gas.   This often only becomes evident when infill drilling between the discovery and appraisal wells demonstrates such discontinuities. Faults identified in the wells within the reservoir rocks indicate localised tectonic displacement and what is called compartmentalisation.  This is the case in the Kutubu oil fields which then required very careful placement of production wells to tap the oil-bearing parts of the reservoir. Sometimes water enters the petroleum bearing reservoir and flushes the hydrocarbons out of place leaving behind only a residual viscous smear of the original oil charge of the reservoir and the flushing waters.  Such was the case in the Toro sandstone reservoir of the large Mananda anticline which showed excellent signs of bearing oil, but the primary charge had been flushed away leaving only a non-recoverable residue.  In some reservoirs, the porosity of the reservoir varies laterally due to changes in the original depositional environment of the sediments, or later mineralogical or chemical changes.  The amount of water remaining in the reservoir pores can vary across a field, and hence the degree of fill of that porosity by hydrocarbons.   As one may realise, the assessment of the original oil-in-place or original gas-in-place can become quite tricky.  Then, there is one more factor that is absolutely necessary for the oil and /or gas to flow into the well bore; that is permeability.  Permeability is the ability of a porous material (such as rock) to allow fluids (either liquids or gases) or gases to flow through it. Permeability measures how easily fluids flow through the interconnected pores under pressure. High permeability allows easy flow, while low permeability restricts flow. The majority of rocks (more than 93%) have very little permeability and a small amount (2%) have fair to good permeability, the balance are considered to be poorly permeable or tight. From the 2% permeabilities range from 1 to 1000 milliDarcies (mD, the unit of permeability named after Henri Darcy).  In the Hides gas field, the reservoir permeabilities of the Toro Sandstone reservoir range from 3 to 2,000 mD with the bulk of readings being between 30 to 150 mD.  Such permeability would be said to be good. Both permeability and porosity are related and in the Hides gas field Toro reservoir, permeability broadly scales with porosity which ranges between 2% to 18%.   Recovery Factor It is good to have an accumulation full of hydrocarbons in a porous and permeable reservoir, but those hydrocarbons still need to be able to get to the surface to be able to be sold. They need to be recovered as oil and gas production. Exactly how much oil and/or gas may be recovered from a reservoir by production is not so easy to estimate.  For oil and gas to flow into a wellbore from a reservoir rock and flow to surface requires energy. The flow has to combat gravity and frictional forces to get to the surface. So quite obviously the higher the pressure of the reservoir and the less viscous the petroleum is, the better it will flow.   Measurements of reservoir pressure are therefore most important.  In a gas field, the natural gas will fill its container, the reservoir and pressure within the connected reservoir will equilibrate.  As the gas is produced, the reservoir pressure will decrease just like a balloon deflating until such time as there simply is not enough pressure to force the gas out of wellbore. That then is the technical end of production. A crude estimate of the recovery factor of a gas field may be expressed as 1 minus the reservoir pressure at abandonment divided by the initial reservoir pressure. Typical gas fields have high recovery rates of between 50% to 80%.   Figure 10: Recovery factor versus depth of gas fields outside the USA with larger than 1 trillion standard cubic feet of gas in place, after Jean Laherrère, International Energy Agency. Of course, gas fills its container and has a very low viscosity; oil is quite different. It is viscous, a liquid and hence moves much more slowly.  It does not fill its container as gas does. When a well penetrates an oil-bearing reservoir, the oil has to flow toward the borehole in response to a decrease in pressure caused by the well’s penetration into the reservoir.  As the pressure differential between the wellbore and reservoir decreases with time, the oil becomes more and more sluggish.  Lighter density oils move easier, but heavier density oils have a hard time. The amount of gas dissolved in the oil very much affects the ability of the oil to flow out of the well because as the pressure is relieved, the gas bubbles out of solution (just like opening a Coca Cola bottle) frothing up the oil and making the oil flow lighter and easier to ascend the well.  The amount of gas contained per barrel of oil in solution is known as the gas-oil ratio.  In the case of the Kutubu fields, the oil was very gassy from the beginning, and so recovery of the oil was much easier.  Indeed, there was so much gas produced with the oil that for many years the gas was reinjected back into the reservoir to help push the oil to surface. In this way, it was also effectively conserved until it too could be produced in the current PNG LNG Project.  Some oil-bearing reservoirs are linked in the subsurface to active aquifers which provide additional energy to help maintain the reservoir pressure for a longer period of time.  Petroleum engineers and production geologists quite often devise water injection schemes to aid oil recovery in which massive amounts of water are pumped into the water lying below the oil to help it flow to the production wells. This is called water flooding. Whilst the extent of gas recovery from a reservoir is more fundamentally connected to the change of reservoir pressure, the extent of oil recovery is not so readily estimated. Elaborate reservoir models may be built describing the reservoir rock, reservoir fluids and their parameters to create simulations of flow through an array of production wells.  These simulations can be correlated to actual flow of wells when tested and an overall assessment of likely recovery scenarios made. Typical oil recovery rates are between 5% to 50% of the original oil-in-place, with an average often cited of around 30% to 35%. Secondary recovery techniques like water flooding and gas injection enhance recovery to between 30 to 40%. Enhanced oil recovery (EOR) techniques may significantly increase recovery by the injection of heat, gases, chemical to reduce viscosity and improve flow, but this comes at a cost.      Figure 11: Recovery factor of 800 oil fields outside the USA, after Jean Laherrère, International Energy Agency   Ultimate Recovery As one produces a field, be it an oil field or a gas field, the resources that were estimated to be in place at the beginning of production are steadily depleted. The extent of the recoverable reserves is reduced by every additional amount of production, so the reserves of a field decline. Those reserves that have been recovered and those that may yet be potentially recovered are referred to as the estimated ultimate recoverable reserves of the field. This is the ultimate measure of the total potential commercial output of a field. To talk of the reserves of a particular petroleum province and its fields one can only project into the future as those resources that were once reserves and have been produced are no longer such. The estimates of reserves are estimates of the volumes of oil and gas that may be commercially recovered henceforth. A common measure of the utility of such reserves is the reserve-to-production ratio (R/P ratio). This estimates how many years the oil or gas will last at current production rates. It is calculated by dividing remaining proven reserves by the annual production rate. A higher R/P ratio indicates more years of supply remaining. If one looks at the Statistical Review of Global Energy, the last edition that examines the R/P ratio was in 2020 providing statistics up to the start of Covid.  Oddly, after that BP and then the new owners of this great and useful report found it necessary to omit the listings of oil and gas reserves and with that, the comparative R/P ratios, perhaps to mollify the notion that a world in energy transition would still be producing oil and gas for decades to come.  Of course, circumstances change as we have seen in the dramatic actions of some nations in the first quarter of 2026.  The picture is clear; a select few countries dominate oil production now and in the longer term. Their ability to produce oil into the foreseeable will depend on their access to markets, which if denied may render their reserves to be purely technical.   Country Proved Reserves (Billion Barrels of Oil) R/P Ratio (Years) Canada 169.7 82.3 Iran 155 120.6 Iraq 145 83.1 Kuwait 101.5 83.1 Russia 107 25.5 Saudi Arabia 297.6 68.9 USA 68.9 11.1 Venezuela 303.8 906.7 Total World 1,733.9 49.9 Figure 12:  Reserve-to-production ratios of countries with more than one billion barrels of proved reserves and the USA as at pre-Covid pandemic in 2019 after Statistical Review of Global Energy. A similar story can be told for natural gas reserves. It is with respect to natural gas that Papua New Guinea earned a row in the statistics of the Statistical Review of Global Energy, having an assessed 0.2 trillion cubic metres of gas as proven reserves and an R/P ratio of 14.2 years.  Papua New Guinea has been producing oil and gas since 1991 when the Kutubu Project produced its initial oil as feedstock for the Project refinery and the Hides Project produced its initial gas as feedstock for the Porgera mine power plant. In 1992, full scale oil production began at Kutubu and in 2014 large scale gas production at Hides for the PNG LNG Project commenced. Papua New Guinea’s discovered oil and gas fields are listed below together with their estimated ultimate recoverable resources and reserves, which includes production to date and remaining resources and reserves. Field Name(s) Year of Discovery Current Licence Current Operator Estimated Ultimate Recoverable Oil Resources and Reserves Estimated Ultimate Recoverable Gas Resources and Reserves         Million barrels  2C & 2P (incl. condensates & LPGs) Billion cubic feet 2C & 2P Barikewa 1958 PRL 49 Kumul Petroleum   439 Bwata 1960 PRL 39 ExxonMobil   68 Cobra & Iehi 1960 PRL 14 Santos   72 Uramu 1968 PRL 60 Kumul Petroleum   92 Pasca 1968 PPL 328 Twinza 90 464 Juha 1983 PDL 9 ExxonMobil 29 578 Kutubu 1986 PDL 2 Santos 337 1733 Hides 1987 PDL 1 ExxonMobil 159 6938 Pandora 1988 PRL 38 Kumul Petroleum   644 Agogo 1989 PDL 2 Santos 59 541 Angore 1990 PDL 8 ExxonMobil 13 1079 Elevala & Ketu 1990 PRL 21 TWL Energy 40 640 P'nyang 1990 PRL 3 ExxonMobil 78 4600 SE Gobe 1991 PDL 3 Santos 46 156 Gobe Main 1993 PDL 4 Santos 31 159 Paua 1995 PPL 378 Giri Energy 17   Moran 1996 PDL 2&5 Santos 20 344 Stanley 1999 PDL 10 TWL Energy 12 399 Kimu 1999 PRL 48 Kumul Petroleum   525 Triceratops 2005 PRL 39 ExxonMobil 2 30 Douglas 2006 PRL 40 TWL Energy 30 500 Pukpuk 2006 PRL 40 TWL Energy 0 365 Elk-Antelope 2006 PRL 15 TotalEnergies 64 6200 FlInders & Hagana 2006 PRL 41 Santos   1100 Ubuntu 2011 PRL 28 TWL Energy 4 100 Muruk 2016 PPL 402 Santos   845    Summations 1031 28611 The summations are pseudo-summations only, not statistical aggregations and should be used as a guide only Figure 13: A list of oil and gas field discoveries in Papua New Guinea and their estimated ultimate recoverable resources and reserves (2C and 2P respectively) after David Manau, Secretary, Department of Petroleum and Energy (now Managing Director, National Petroleum Authority) modified and amended by the author from public information. The extent of the future discovery of Papua New Guinea’s petroleum resources will depend entirely on investment in exploration and the necessary drilling of valid prospects.  In turn, the extent of reserves will depend on investment in development where production of those reserves may be assessed to be commercial.  Without such further investment, we can only produce those resources and reserves that are remaining until they are depleted to the extent that we can, given considerable infrastructure limitations.   Only successful exploration including the vital drilling of exploration wells will allow the above table to be augmented with Papua New Guinea’s yet to be found petroleum resources and reserves.   Word = 6,927    

BizPrint, a member of the Remington Group, has announced a major investment in the Konica Minolta AccurioPress C12010S, the first digital press of its kind to be installed in the Pacific region. The decision to bring the AccurioPress C12010S to Papua New Guinea reflects BizPrint's position within the Remington Group's technology ecosystem. As part of the Remington Technology brand and through its partnership with Konica Minolta, BizPrint gains early access to next-generation print technology to replace traditional offset printing. "We jointly identified an opportunity to give BizPrint a point of difference and to offer the PNG market the value that comes with a 5-color digital press with built-in finishing, giving exceptional quality, consistency and automation—not only in the PNG market, but across the Pacific region as a whole," said Remington Group CEO Justin Kieseker. "We're proud to support BizPrint and the Remington Group as they bring this first-of-its-kind production print capability to the Pacific region. This investment opens new opportunities for local businesses to access high-quality, creative and efficient print applications, backed by the training, technical expertise and service support needed for long-term success. It's a strong example of partnership delivering practical innovation for customers across the Pacific," said Yohei Konaka, managing director of Konica Minolta Australia. The press handles extremely thick paper and cardstock, up to 450 gsm, as well as shiny or smooth finishes, stickers, textured linen and specialized waterproof paper-plastic blends. These flexible, moisture-resistant materials make it ideal for product packaging and manufacturing labels. Two key features set the investment apart as a benchmark for the industry's future in PNG: White ink and spot-color capability: Along with standard CMYK, the machine enables spot-color effects to highlight underlying and overlying artwork, creating shadow and shimmer finishes previously unavailable in the local market. Integrated Plockmatic Booklet Maker: The press is fitted with a Plockmatic Booklet Maker, enabling booklets with covers up to 250 gsm and pages up to 150 gsm to be collated, folded, bound and trimmed to size automatically. Ahead of installation, the company sent two technicians to the Konica Minolta Training Centre in Sydney for a two-week intensive course covering the new equipment. This was followed by three weeks of in-country support from three Konica Minolta specialist trainers and technicians, who oversaw the installation of the digital press and the Plockmatic SD-450e booklet finisher. "The investment in hardware is one thing — however, it is the investment in our people that we are most proud of," said Kieseker. "The key to its success lies in both our people and the creative work, and we have proudly invested in both to ensure BizPrint continues to be a market leader, both now and for years to come."

Hastings Deering PNG showcased its long-standing commitment to Papua New Guinea's resources sector at this year's event, while highlighting the important role skills development and local capability continue to play in supporting the nation's growth. A key highlight for Hastings Deering PNG was an exclusive visit from Prime Minister James Marape ahead of the official opening of the exhibition. During his tour, Prime Minister Marape visited the Hastings Deering PNG stand. Accompanied by government ministers, industry representatives and members of the media, the Prime Minister spent time engaging with the Hastings Deering PNG team, experiencing the Learning Simulator and learning more about the company's investment in training, capability development and workforce readiness. Prime Minister Marape acknowledged Hastings Deering PNG's significant contribution to developing Papua New Guinean talent and supporting the nation's workforce through technical training, apprenticeships and long-term career opportunities. He also recognised the company's proud history of more than 75 years of operations in PNG and its ongoing contribution to the country's economic growth and development. Through ongoing investment in training and professional development, Hastings Deering PNG continues to help build the skilled workforce needed to support PNG's growing resources and infrastructure sectors. Hastings Deering PNG Sales and Marketing Manager Anthony Rosson said the company's success is built on the strength, capability and commitment of its workforce. "At Hastings Deering PNG, we help customers maximise productivity through industry-leading Caterpillar equipment and the expertise of our local team. Every machine purchased through Hastings Deering PNG represents a dual investment: in proven Caterpillar performance and in the Papua New Guineans who provide the technical support, service and expertise that keep customer operations running. "PNG Resource Week provided an excellent platform to demonstrate the value Hastings Deering PNG delivers beyond the equipment. Our customers gain access to world-class equipment while directly supporting the development of local skills, jobs and capabilities, creating benefits that extend well beyond the worksite and assist in the long-term development of PNG communities." Across the four-day exhibition, the team connected with customers, business partners, government representatives and industry stakeholders, demonstrating Hastings Deering PNG's expertise across equipment sales, product support, service solutions, and learning and development. The event provided valuable opportunities to strengthen existing relationships, explore future business opportunities and share insights on the challenges and opportunities facing the industry. PNG Resource Week 2026 provided a valuable platform to showcase the expertise of the Hastings Deering PNG team, strengthen industry partnerships and reaffirm the company's role in supporting the industries and communities contributing to PNG's future growth and prosperity.