The Hidden Fortune Beneath: Papua New Guinea’s Oil and Gas Wealth and the Path to Middle-Power Prosperity

Papua New Guinea (PNG) is not just a nation of towering highlands and coral-ringed coasts—it is a geological superpower. Beneath its rugged terrain and offshore basins lie some of the Asia-Pacific’s most promising oil and gas reserves. Yet, despite exporting over 100 million barrels of oil and 300 billion cubic feet of LNG in the past decade, PNG remains one of the region’s poorest nations per capita. This paradox—the resource curse in real time—is the central geopolitical challenge of our generation.

At 1-Tok.org, we believe PNG’s hydrocarbon wealth is not a curse, but a strategic asset that can propel the country toward middle-power status in the 21st century. The question is not whether PNG has the resources, but how it transforms them into national power, regional influence, and sustainable prosperity.

The Scale of the Prize: PNG’s Oil and Gas Portfolio

PNG’s hydrocarbon endowment is both proven and underexplored. Here’s what we know—and what remains untapped:

Source: PNG Department of Petroleum (2024), USGS Papua New Guinea Assessment (2023), ExxonMobil Investor Reports

The PNG LNG project, operational since 2014, is the crown jewel. Led by ExxonMobil with partners Santos and JX Nippon, it has generated PGK 58 billion (~USD 15 billion) in export revenue since inception. In 2024 alone, it contributed ~30% of government revenue—a lifeline during global commodity slumps.

But this is just the beginning.

The Next Frontier: Three Game-Changing Projects

Three major developments are set to double PNG’s LNG output by 2030:

1. Papua LNG (TotalEnergies)
   • Location: Gulf Province (onshore Elk-Antelope fields)
   • Capacity: 5.6 million tonnes per annum (Mtpa)
   • Investment: ~USD 10 billion
   • Status: Final Investment Decision (FID) expected Q1 2026
   • Geopolitical bonus: First LNG project with 50%+ local landowner equity via landmark 2023 deal.
2. Pasca A Gas-Condensate Field (Twinza Oil)
   • Location: Offshore Gulf of Papua
   • Reserves: ~1 Tcf gas + 50 million barrels condensate
   • Unique: PNG’s first offshore gas development led by a mid-tier operator
   • Status: Development license granted 2024; first gas targeted 2029
3. P’nyang Gas Field (ExxonMobil)
   • Potential third train for PNG LNG expansion
   • Could add 3–4 Mtpa if fiscal terms are resolved

Together, these projects could push PNG’s LNG exports to ~20 Mtpa by 2035—rivaling Qatar’s early growth phase.

From Revenue to Power: The Middle-Power Playbook

Oil and gas are not just revenue streams—they are strategic leverage. Here’s how PNG can convert barrels and cubic feet into geopolitical influence:

1. Build a Sovereign Wealth Fund 2.0

Norway’s US$1.6 trillion fund was built on less oil than PNG could produce. A revamped PNG Sovereign Wealth Fund (currently under-resourced) could:

• Stabilize budgets against price volatility
• Invest in education, health, and infrastructure
• Fund foreign aid programs in Melanesia—soft power in action

2. Lead the Pacific Blue Economy

PNG’s Exclusive Economic Zone (EEZ)—larger than Indonesia’s—overlaps with its gas basins. By linking LNG exports with marine conservation, PNG can:

• Chair a Pacific LNG & Climate Resilience Pact
• Demand carbon credits for avoided deforestation
• Position itself as the green voice of small island states

3. Diversify Partnerships—Avoid Dependency

PNG’s “friends to all, enemies to none” foreign policy is smart—but risky. Gas wealth allows strategic hedging:

• Japan & South Korea: Long-term LNG buyers (20-year contracts)
• Europe: New market post-Russia (Papua LNG targeting EU)
• China: Infrastructure partner, but not the sole buyer

The Roadblocks—and How to Clear Them

For all its potential, PNG’s oil and gas sector is plagued by structural failures:

A Call to Action: This Is PNG’s Moment

The world is hungry for reliable, responsibly sourced energy. PNG sits on the reserves, the geography, and the moral high ground (as a developing nation) to supply it.

But wealth without strategy is waste.

1-Tok.org calls for:

• A National Oil & Gas Master Plan 2035 with middle-power goals
• 30% of all resource revenue ring-fenced for education and health
• PNG-owned midstream infrastructure (refineries, pipelines) by 2040
• Youth training programs in petroleum engineering and geopolitics