Will Natural Gas Extraction in Papua New Guinea Generate Cash or Quarrel?

Submitted by administrator on Mon, 2014-07-14 10:53
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A substantial natural gas reserve has been discovered in Hides Field of Papua New Guinea by one of Exxon’s Australian partners, Oil Search Ltd. This news comes off the heels of falling output for Exxon over the past three years; therefore, this new natural gas field could reverse said trends. As of only May this year, natural gas production in Papua New Guinea has amounted to $19 billion. If the proceeds are divided fairly between the involved parties (government, corporation, and tribal units), continued extraction of natural gas will provide a large financial benefit for the area as well as many positive externalities. Previously, the allocation of benefits regarding several other projects has resulted in conflict between the government and tribal landowners. Mr. Botten of Oil Search is a longtime resident of Papua New Guinea expressed that he would be, “reasonably optimistic that rewards from the project would be distributed equitably.” As natural gas becomes increasingly more popular, we will see how tribal landowners, corporations, and the government fit into the financial landscape as Papua New Guinea welcomes foreign direct investment. Check out the article here.