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Sorting fishing nets
The islands were probably first settled around 3,000 years ago by migrants from the Philippines. Negritos (Pygmys) lived there until 1100 AD when people from the Sunda islands took over.
Some of the islands were sighted by Europeans in 1522 and, after Spain conquered the Philippines in 1565, Palau became part of the Spanish East Indies. However they were left alone until 1697 when Jesuits began to visit and the Spanish and British began to trade.
In 1899 defeat in the Spanish–American War forced Spain to sell most of the Caroline Islands to Germany. In 1914, during World War 1, Japan annexed the archipelago and, after the war, administered it within the South Pacific Mandate.
In 1944 the USA captured the islands and took the mandate in 1947. Having voted against joining the Federated States of Micronesia in 1979, Palau opted for independent status, becoming a republic in 1981 and gaining sovereignty in 1994 in association with the USA.
The economy is based on tourism, agriculture and fishing. The islands are a financial centre but also depend on foreign aid.
Palau is an archipelago of around 250 islands however most of the population live on just 5 (Angaur, Babeldaob, Koror, Peleliu and Kayangel) of which two-thirds live on Koror. Babeldaob is by far the largest and is primarily volcanic.
All the other islands are reef limestones or atolls some of which have a volcanic core. These mostly comprise 200 uninhabited islands to the west known as the Rock Islands but also a remote group of 6 islands, known as the Southwest Islands, which lie 604 kms to the southwest.
The Palau archipelago lies on the Kyushu Palau ridge which is an uplifted part of the Philippines tectonic plate. The islands are the remains of an island arc that developed adjacent to the Ryuku trench, the subduction zone at the margin of the Eurasian plate.
This geology is not suitable for the generation and accumulation of commercial volumes of oil and gas and Palau has no indigenous oil or gas resources, either onshore or offshore. Globalshift believes it is very unlikely to achieve any production in the future. No exploration wells have ever been drilled in the country.
Map and National Flag
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Land area (sq kms)
Oil prod (000s b/d)
Gas prod (bcm/yr)
Oil cons (000s b/d)
Gas cons (bcm/yr)
Palau is a democratic republic. The President is both head of state and head of government. Executive power is exercised by the government, while legislative power is vested in both the government and the bicameral Palau National Congress.
The Senate has nine elected members and the House of Delegates 16 elected members. The USA provides defence, funding, and social services.
There is no department of government in Palau specifically responsible for oil and gas resources.
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