In his speech, O'Neill welcomed visiting athletes and their supporters and said the games showcased the sporting talents of those participating but also represented the economic changes happening in the region.
"They are a demonstration of the change that is taking place, and the new standards that are being set in the Pacific," he said.
"We are living in the Asia-Pacific century. Global economic growth and development [is] centred on our part of the world [and] the games bring our vast region together and builds strong bonds between people and nations."
O'Neill also said the sporting facilities were "world-class" and would benefit Papua New Guineans for "generations to come".
He also said the opening ceremony set a new standard for major events in the region, with artistic director Airleke Ingram telling the Games Wire Service that it was a celebration of the country's cultural heritage while looking towards the future.
"We can use our culture to draw upon our values and maintain our integrity as a people and use that to guide us into the future," Ingram said.
"These things set our culture up, where we really got our spirit of generosity and the fair distribution of wealth."
Over two weeks, 3000 athletes from 24 countries will compete in 28 individual and team events.
At the time of writing, PNG sat atop the medal tally with four gold medals, followed by Fiji with three gold, one silver and five bronze medals, and New Caledonia sitting in third place with two gold and two bronze medals.