"We are looking forward to increasing our presence in New Zealand, either by further exploration or by acquisitions such as Kupe," OMV Australia managing director Wolfgang Zimmer told EnergyReview.Net from Wellington today.
"We are actively looking to get involved in Kupe and have been talking with (present operator) Genesis Power. Although we have not yet done a full technical review, we are interested in becoming operator."
Zimmer said OMV did not want to underestimate the technical risk of the Kupe field which has lain undeveloped off south Taranaki since being discovered 16 years ago by a New Zealand Oil and Gas-led consortium.
However, two factors made OMV hopeful that the marginal field would prove economic to develop within the next few years. These factors were the technological improvements of the past decade, plus the likelihood of increasing wholesale gas prices once the Maui field ran out in four years or so.
He said increasing wholesale gas prices should make the development of Kupe economic. He did not rule out Methanex, as well as electricity generators, successfully bidding for some Kupe gas, if Methanex was prepared to pay more than its usual $US1 per Gigajoule.
It would make sense for Methanex to pay marginally more to help its Motunui and Waitara Valley methanol plants keeping operating beyond 2007, than to shut the plants down, thus cutting its revenue stream, and perhaps shipping parts of the Motunui complex off to Western Australia for its Burrup Peninsula project.
In May EnergyReview.Net reported Genesis Power boss Murray Jackson as saying that Genesis (which holds a 70% stake in Kupe) was talking to a number of companies about them taking over from Genesis as Kupe operator. It was likely the government would sell its 11% "free carry" to a potential operator before any commitment would be made to develop Kupe, which holds about 260 Petajoules of gas and 15 million barrels of liquids. Genesis was hopeful a field development plan could be started in 2004, Jackson said.
Zimmer said OMV Petroleum's recent purchases of interests in the offshore Maui and Maari fields, plus its stake with Shell and Todd in two new offshore blocks, should enable it to become a significant player in New Zealand.
Shell New Zealand in late September announced the sale of a 10% Maui interest and all (49%) of its interest in the more southerly Maari licence to OMV.
Even though Shell had exited Maari "it's for them too small" OMV was confident the marginal Maari oil field should be developed, given a favourable result from the Maari-2 appraisal well due to be drilled shortly.
As operator of the Maari licence PEP 38413, OMV would be opening an office in New Plymouth shortly for Maari-2, which should be drilled by the Ocean Bounty semi-submersible rig from January.
Zimmer and two other people from the OMV Perth office have been in Wellington this week talking to fellow Maui partners Shell New Zealand and Todd Energy, Energy Minister Pete Hodgson and his associate Harry Duynhoven, Crown Minerals and others.
He said OMV had no intention of making submissions to Maui adjudicator Netherland Sewell and Associates International on the Maui reserves redetermination, even though as a Maui partner it was now entitled to do so. NSAI is due to make its report, on the possible reduced remaining reserves in the field, to the Maui parties in mid-December.
