ACCESS to electric power is one of Papua New Guinea’s most significant development challenges.
Oil Search’s recent focus on the electricity sector in PNG is a strategic response to this challenge.
With its new power business, the company aims to deliver financially sustainable power solutions that will strengthen and build the capacity of providers, promote greater energy reliability for industries and deliver cleaner and affordable electricity.
Michael Uiari (pictured), head of business development with Oil Search Power Holdings, said it is logical for the company to offer its in-country project management and operating expertise to help find solutions for the government to improve access to electricity.
Mr Uiari said this is complementary to its export business which helps power Asian countries through the country’s sales of liquefied natural gas and it is now venturing into the domestic power sector.
"As a PNG company, it’s the right thing to do, to assist government with providing access to power for the people and the growth of the country’s industry, as well as contributing to our company’s profitability,’’ Mr Uiari said.’
In PNG, government policy has turned to the private sector for power generation, hence the introduction of independent power producers, which marks the start of further liberalisation and subsequent privatisation of electricity.
Mr Uiari said Oil Search’s entry into the business is through proposals for generation and use of domestically sourced fuels through its Highlands and Morobe generation projects.
Oil Search is also working with PNG Power to understand the costs and issues associated with trying to connect people in remote locations.
Mr Uiari said access to power in PNG is very expensive.
The high price results from a blend of fuel prices, combined with a very low user base, high system and logistics costs and a significant proportion of electricity that does not derive revenue.