SINGAPORE -- In a bid to attract international investors to further develop its hydrocarbon resources, the Papua New Guinea government has launched its first bidding round, offering 15 blocks, with a 69% gross profit share to contractors under a new fiscal regime.
At least 10 of the blocks are in the coastal and Gulf of Papua area in water depth ranging from 20 m to 2,500 m, and come with a 12,000 km of new seismic data as well as 30,000 km of reprocessed and reinterpreted data.
Key criteria for selecting bidders would be the commitment to the number of wells to be drilled, the use of latest technical expertise, and support of financial resources.
The concession would come with six years of exploration with extension option for five years. A 30% tax incentive would be granted to development project undertaken in the concession acreage before Dec. 31, 2017, having signed the block before Dec. 31, 2007.
The blocks, in sizes from from 1,900 sq km to 11,700 sq km, have newly recognized prospectivity and were closer in proximity to existing discoveries on the Papua sedimentary basin.
"For each dollar earned as gross profit, under PNG's fiscal regime, the private developer will retain 69 cents, compared to only 42 cents in Australia and 40 cents in the Philippines," said Petroleum and Energy Minister Sir Moi Avei.
Moi said the blocks have strong potential for new gas, which would be in addition to the existing 15 tcf of proven and 40 tcf of probable natural gas reserves in PNG.