The discovery of industrially-viable deposits of oil in Papua New Guinea followed later than the discovery of precious mineral ores but in many respects the chain of events was similar and oil is now potentially as valuable an export commodity as gold, silver and copper.
Chevron Niugini is the operator of the Kutubu Joint Venture that was set up to drill for oil in PNG’s first discovered oilfield near Lake Kutubu in Southern Highlands Province. Starting in 1987 with an oil exploration licence, its geologists discovered what it believed to be an oil reserve of approximately 250 million barrels. But the geographical maps showed that it was in a place that had not only no road access but where it would be too difficult to build a road anyway. It was also a long way from the coast and any port that could serve as a terminal.
One by one solutions to these problems were proposed. It was decided that the main site could be built and serviced by helicopters and that a pipeline could be built from Kutubu to an oil terminal 267 kilometres away in the Papuan Gulf. Then came the long process of working with the local people to ask for their permission and their co-operation to have access to the land, to put up the necessary buildings, to sink the bores and to cross the land with the pipeline. Compensation had to be paid to many people to achieve these agreements.But Chevron Niugini also knew from the beginning that, whether compensation was large or very large, only a project that also paid serious attention to the cultural, social and environmental disruption that such first-time development would cause would have any chance of success in the Papua New Guinean situation. The tragic example of Bougainville, where the mine was closed by disaffected citizens and there was considerable loss of life of both Bougainvilleans and PNG Government forces, is all too recent a memory in this part of the world for any new enterprise to take these matters lightly. Besides, Chevron Niugini had a positive belief in the benefits they would be bringing to the local people. They planned what roads they could, they built schools, installed health services, took on and trained local staff and employed a 40-strong community relations unit to bridge the gap between cultures. One of the innovations of this unit was to create a set of written genealogical records for the people of the area.
On the environmental side, Chevron’s engineers and scientists designed and built the facilities to a standard that equalled or exceeded their existing global policy of causing minimal environmental impact. The first thing they took care about was to design systems which would keep the oil contained at all times, so that there was very little chance of accidental spillage in the area of the oilfield, along the pipeline, or into the waters of the Gulf. In fact it is quite hard to see oil at Kutubu – it is all in pipes. They also tried to minimize the damage caused to the environment during the construction stage, when helicopters were flying in and out every hour and there were hundreds of workers moving around with bulldozers and earth-movers and trucks of spoil. They preserved whatever vegetation they could – important in a society where single trees are claimed in ownership – and insisted that the track used to lay the pipeline was particularly narrow, so that regeneration would cover it as soon as possible.
It all paid off. Although it has not been easy – the intrusion of one culture into another can never be thought of as being “easy” – Chevron Niugini has not experienced the major setbacks that might have been expected. Oil has been pumped out of the reserves, carried along the pipeline and sold in the international market for a profit. Taxes and fees have been paid to the government and the land-owners. People have been employed, have been trained and have gained experience. Businesses have been founded and will probably remain. All without disaster – and all because of oil.
For Chevron Niugini, of course, it has not been a one-off success. Kutubu will be exhausted in the next three or four years. Chevron Niugini is already looking to their next oilfield – and their next set of solutions.