Company exploration manager Eric Matthews yesterday told the Utilicon 2003 Conference in Auckland that more needed to be done to encourage further exploration for gas and to make it easier to develop dormant, discovered fields.

He said the cheap price of Maui gas had suppressed exploration enthusiasm until recently and that the Government should offer further financial incentives to encourage more exploration for gas in light of the fast dwindling Maui field.

Matthews told EnergyReview.Net before he spoke to the conference that "a peculiar set of circumstances" had so far stymied any development of the Kupe field, which NZOG discovered south of Taranaki in 1986. "You have a valuable resource just sitting there waiting to be developed."

He estimated about $NZ100 million had so far been spent in drilling and development efforts, but to no avail. He said an open access regime for the Maui pipeline, to allow non-Maui gas to be piped north, was critical to the development of both the Kupe and Pohokura fields.

Sydney-based Matthews was heartened when told by EnergyReview.Net that Maui Development Ltd chairman Lloyd Taylor had last year said he hoped to have worked through most problems associated with common carrier provisions for the Maui pipeline by mid-2003.

Matthews is reported as saying that it was likely that Kupe was a pressure-depleting field, making it easier to predict how much gas was in the field, compared with Maui which was now a water-driven field, making it more difficult to accurately predict when it might run out.

It is also reported that Pohokura partner Preussag Energie gave an update on the field off north Taranaki that is likely to be a major "replacement" for Maui.

New Zealand company vice-president David Salisbury outlined some of the huge financial risks faced by the owners, Shell, Todd Energy and Preussag, in bringing the gas ashore and ready for sale. He said some estimates of the total development cost for Pohokura could be as high as $NZ1.4 billion.

It is understood the first tranche of Pohokura gas, about 200 bcf, is expected to go to tender in October-November, with a decision likely by the end of the year.

Electricity generators such as Contact Energy and Genesis Power are believed to be favorites to secure a large proportion of that gas, though industry commentators say methanol manufacturer Methanex could surprise everybody with its bid.