The District Commissioner
Addendum 55: Kutubu Oilfields
Additional information for Chapter 30 - Transfer to Mendi)
The following information was sourced from the PNG State owned Mineral Resources Development Company Limited (MRDC) website at www.mrdc.com.pg/kutubu-ltd.html “The Kutubu oilfields are located in the Southern Highlands Province, 480 kilometres northwest of Port Moresby. The Kutubu project was Papua New Guinea’s first oil development and consists of a number of producing wells, which together are called the Agogo and Lagifu - Hedinia field.”
Oil …production commenced in June 1992 after a 1987 exploration licence indicated oil reserves were approximately 250 million barrels. The project was operated by Chevron Niugini, a subsidiary of Chevron, until 2003, when its operation was taken over by Oil Search Limited” (which has now merged with Santos Ltd). “The project consists of oil producing wells from the Iagifu-Hedinia, Usano and Agogo fields, a Central processing facility, a 265 kilometre export pipeline to the coast, and a marine loading terminal in the Gulf of Papua (Kumul Terminal).
The main sites were built and serviced using helicopters (4,000 Hercules airplane flights in the space of one year's construction alone) due to limited road access. It was a massive undertaking to build the pipeline because of the terrain it covered and also because it involved negotiating with many different landowner groups.
This photo of the Kumul Terminal was sourced from the PNG Department of Petroleum and Energy website at petroleum.gov.pg/kutubu-oil-porject/
The 2010 Petroleum Annual Report on Petroleum Activity in Papua New Guinea compiled by the Exploration Branch in April, 2011 states that “The Kutubu field is a mature, developed field that has produced 307 MMBBL” (million barrels) “of oil since commencing production in the late 1991. Oil production peaked in March 1993 at a rate of over 137 thousand barrels of oil per day (MBOPD). Since 1996 the field production rate has declined as the gas-oil ratios (GOR) have increased.”
It is a balancing act to manage the royalty and employment benefits of the oil project against the environmental pollution risks. Lake Kutubu is the second-largest lake in Papua New Guinea, after Lake Murray. Its size is in excess of 49 square kilometres. Lake Kutubu and Lake Sentani form an ecoregion listed on the World Wide Fund’s Global 200 and there are 33 villages with more than 10,000 locals in the area.