New Zealand Oil and Gas has confirmed what EnergyReview.Net reported last month - that the Diamond Offshore Drilling rig is the likely contender for several wells, planned and possible, off Taranaki. The rig drilled four wells in Taranaki waters a year ago.

Chairman Tony Radford told the NZOG annual meeting last Friday that a letter of intent had been signed with Diamond Offshore Drilling for the use of one of its semi-submersible drilling rigs - "most likely it will again be the Ocean Bounty which drilled the Tui discovery well" (in licence PEP 38460 for NZOG and partners).

Radford said NZOG could drill two or possibly three further wells in PEP 38460 in its latest drilling campaign, with the first being into the Amokura prospect just 4km away from the Tui oil discovery. "A good discovery here would almost certainly lead to early development of Tui-Amokura on a joint basis - possibly within 18 months."

The second well would be drilled into the Pukeko prospect, about 70 km away from Tui, as NZOG believed Tui oil might be sourced from an area close to Pukeko. The Kapuni Formation targets at Pukeko would be the C sands (which are productive at the more southern Maui field) and the F sands (which contain oil at Tui and Maui).

The C sands structure was sufficiently defined by seismic to justify early drilling and was of a size which could hold in 80 million plus barrels of recoverable oil. The F sands structure was more complex, due to faulting, and a decision on whether to drill a third well would depend on results from Amokura and Pukeko, said Radford.

The Bounty could also be utilised by other joint ventures - Indo-Pacific Energy and PEP 38480 partner Durum Energy and the Maui-Pohokura partners - Shell New Zealand, Todd Energy and OMV Petroleum - in either PEP 38481 or 482 and perhaps into the bypassed Ihi pocket of gas within the Maui mining licence.

Meanwhile, Radford also told the annual meeting that the onshore Taranaki Ngatoro oil field, which NZOG subsidiary NZOG Services operates, had been shut for the past week, due to continuing disputes with co-venturer Greymouth Petroleum.

"The matters placed in dispute by the Greymouth companies involve quite a number of items, which are too complex to air in detail at this meeting.

"I do assure you, however, that the NZOG companies continue to observe and fulfill their environmental and other operational obligations strictly in accordance with the Crown Minerals Act and Resource Management Act, as well as in compliance with the Ngatoro joint venture agreement," he assured the meeting.

The various issues, including procedures to enhance oil recoveries, should be sorted out in due course, "but that may take some time", he warned. "Despite these immediate issues, Ngatoro remains a valuable asset."

Commentators say the NZOG-Greymouth dispute looks very similar to those between Greymouth and former Ngatoro partner Indo-Pacific Energy over the controversial Goldie oil prospect within the same licence.