THE oil and gas or petroleum sector is expected an unprecedented growth of 156.3 per cent reflecting full calendar year of gas production. The growth is mainly attributed to the world’s energy giant ExxonMobil-led PNG LNG Project worth K50 billion.
The project has also made taking into consideration other oil and has projects that are currently being developed, such as the Stanley Gas Project led by Horizon and Talisman Energy, the proposed second LNG Project in the Elk/Antelope, and other major explorations and near development petroleum projects in the country.
Treasurer Patrick Pruaitch yesterday while giving an overview of the 2015 National Budget at the Parliament House told press that international development partners, diplomatic corps, and representatives of government departments and statutory bodies, PNG’s economy has grown significantly and is expected to continue.
The Treasurer also said the growth is expected by a strong 15.5 per cent in 2015 and non-mining economic growth projected at 4 per cent. From the PNG LNG Project alone, more than K2.2 billion is expected to flow into the state while K1.2 billion is expected to flow into the Budget where dividend will be split between the share-holding company, National Petroleum.
Mr Pruaitch said supporting this growth is the agriculture, forestry and fisheries sector which is expected to expand by 3.9 per cent during the year. He attributed the projection to renewed confidence in the growing condition of cash crops supported by gradual improvements in global demand.
The former World Bank Chairman who just relinquished the chairmanship also added that the other factors also considered to boost the activity in the non-mining sectors include the 2015 South Pacific Games and the preparation for the 2018 APEC meeting.
Mr Pruaitch while presenting the budget in Parliament revealed that the economy is expected to grow strongly by 8.4 per cent by the end of this year, which is higher than the 6.2 per cent projected at the time of the 2014 Budget and the 5.4 per cent projected during the Mid-Year Economic and Fiscal Outlook (MYEFO) report.
This upward revision is due to the early commencement of LNG gas production and export. Other contributing factors include favourable gold production from one of the major mines and a rebound in copra production due to high copra prices during the second half of 2014.
Despite these positive developments, non-mining Gross Domestic Product is expected to grow at 1.4 per cent in 2014 down from 4.9 per cent in 2013. The decline is due to slowdown in domestic economic activity as the economy descends from LNG related peaks associated with the completion of the PNG LNG construction phase.
It is anticipated that the flow on impacts of the government’s fiscal stimulus put in place in the 2014 Budget would fill some of the gaps created by the end of PNG LNG construction.