It is all but inevitable that taxpayers will now cover the costs of decommissioning the Tui oil field and associated assets, once owned by Tamarind Resources through its now-defunct subsidiaries. 

"It is very concerning to me that taxpayers may be on the hook for decommissioning costs," minister Woods told Energy News in a statement. 

Tamarind Resources is a Malaysian company, which through a variety of subsidiaries owns producing oil and gas fields in New Zealand, the Philippines, and Australia. 

Last year the company's subsidiary Tamarind Taranaki went into voluntary administration, citing "a number of commercial factors."

Tamarind Taranaki owned the commercially productive offshore Tui oil field until it went into administration, and then liquidation in December, with BorrelliWalsh appointed. 

The limited liability subsidiary owed hundreds of millions of dollars to contractors and creditors, including FPSO provider BW Offshore. 

Minister Woods said the government was yet to become the full legal owner of the Tui assets but had begun planning decommissioning. 

The mess created by Tamarind Taranaki has not just left contractors like BW Offshore,with claims in the region of $300 million, but also the government which is considered an unsecured creditor. 

Minister Woods said the Crown could only seek legal remedies from Tamarind Resources' subsidiaries and its directors via a liquidation claim. 

However, with the company's subsidiaries now expected to be wound down, this undoubtedly means the taxpayers will have to front these costs. 

Woods said the government currently had no estimate on what the cost would be to decommission, plug and abandon the Tui field. However, Energy News notes the government has submitted a creditors claim of US$100 million related to decommissioning costs. 

"These costs will be developed over time based on advice from technical specialists," minister Woods said. 

However decommissioning an oil field the size of Tui, could come at a cost of hundreds of millions of dollars. 

The New Zealand Labour government has subsequently begun a wide review of the Crown Minerals Act, and plans to make decommissioning and abandonment obligations explicit in the Act across all oil and gas fields in the country. 

Energy News was able to obtain details of a number of proposals being considered which will affect oil and gas operators in the country. 

One proposal would see new regulatory powers requiring "provision of financial security" for decommissioning costs by permit holders. 

The government has also floated the idea of unprecedented access to group financials, to ensure operators are in a solid cash position to pay for decommissioning. 

"The government is likely to seek to secure a form of financial security from smaller industry participants looking to enter the New Zealand markets, especially in the acquisition of late life oil and gas assets," Woods said. 

This is in contrast to Australia, where the shuttered FPSO the Northern Endeavour floats in the Timor Sea and whose decom costs could run to $200 million to the Australian taxpayer, which as yet has no formal legislation to bar the sale of assets with high decommissioning costs to small scale operators with little cash, though the minister for resources does technically have veto power over any sale.  

Operators could also be required to seek approval from the minister to cease petroleum production. 

Woods explained that Tamarind Resources had acquired the Tui oil field through an unconventional process. 

Tamarind bought the Tui field from AWE in 2017.

It acquired the assets by buying out AWE's subsidiaries, which through a loophole in legislation, meant it did not have to obtain ministerial consent, which is the norm when a company buys an oil and gas field in New Zealand. 

"It effectively allowed a backdoor way to acquire the permit which was not subject to the same tests as a change of operator," she  told Energy News. 

"Because there was a change of control and not, in legal terms, a change of operator, a full capability assessment of Tamarind was not required." 

This "loophole" was closed in February last year after the minister amended the Act. 

Tamarind mess not reflective of oil and gas industry: peak body 

The minister's comments come after New Zealand's peak body for the oil and gas industry said it had been left "frustrated and disappointed" by Tamarind Taranaki's demise, and moved to reassure the public that the company's liquidation and issues of decommissioning were an "isolated case." 

The Petroleum Exploration Production Association of New Zealand (PEPANZ) said the Tamarind situation was "very unusual" and not business as normal for the industry. 

"Companies are responsible for decommissioning costs, and by and large this is what happens. The situation with Tamarind is very unusual, frustrating and disappointing," PEPANZ chief executive John Carnegie said.

PEPANZ noted  the parent company had a guarantee with the New Zealand government, and while the Environmental Protection Authority believes the full costs or majority of costs of decommissioning will be passed to taxpayers, that Tamarind Resources may still  come good. 

Tamarind continues to operate in New Zealand and Australia 

Last month Tamarind, through another subsidiary, began production from the Supplejack field in the onshore Taranaki Basin. Production from the field will be 4 million cubic feet per day, and gas produced will be exported via pipeline to the domestic market.  

Tamarind Resources also began a comprehensive multi-well workover program at its onshore Cheal field, which is owned through yet another subsidiary. 

Activist group Greenpeace slammed the mother company for "shirking its responsibilities" and said if Tamarind Resources had the money to produce from other fields, it should clean up its Tui oil field. 

Greenpeace refuted PEPANZ's statement that Tamarind's case was isolated, and said it had become "common practice" for oil and gas explorers and producers to operate through subsidiaries to avoid liabilities. 

"Tamarind's failure to clean up its mess off the coast of Taranaki is not doing the industry any favours," Greenpeace NZ climate and energy campaign director Amanda Larsson said in a statement. 

Energy News has attempted to contact both the New Zealand and Kuala Lumpur offices of Tamarind Resources several times with no success.