Late last week Auckland-headquartered Greymouth issued its field development proposal, which effectively entails merging the operations of Ngatoro and the nearby Kaimiro field, to the media and other parties.
Fellow Ngatoro partners New Zealand Oil and Gas and Indo-Pacific Energy were caught unawares of the release or even that Greymouth had formulated its own plan to cut operating costs and boost production from the flagging onshore Taranaki field.
"It's odd to say the least, that six months after resolutely refusing to respond to other proposals put to the joint venture, that Greymouth now come out with their own plans," Indo-Pacific chief executive Dave Bennett told EnergyReview.Net from Wellington.
"Greymouth seems to have some peculiar ideas about joint venture procedures.
"However, it's nice to see Greymouth taking a technical interest in a field as opposed to a quasi-legalistic one," added Bennett, referring to the current High Court action by Greymouth against Indo-Pacific and its sole - risk Goldie-1 well drilled last year within the Ngatoro mining licence.
NZOG exploration manager Eric Matthews told EnergyReview.Net that it was "strange" that Greymouth should release its plans to the media, but not the other joint venture partners.
"They are wanting to make a big splash, a big push, that they are finally doing something about this field. But if they'd a modicum of decency there would have been proper discussions, about a lot of issues, with the partners beforehand," he said from Sydney.
"There are also some commercial overlays here," Matthews hinted at, though he declined to specify those concerns.
NZOG currently holds a 35.43% interest in the Ngatoro field, PMP 38148, and acts as operator; while Indo-Pacific holds a 5% stake in the Ngatoro field through subsidiary Ngatoro Energy Ltd.
Industry commentators are more forthright in their assessment of the situation, with some agreeing about Greymouth's basic proposal.
"Is this a joke? Are the current litigation kings of the Kiwi oilfield proposing a joint development with their partners? The Goldie debacle would have scared a few people off doing business with them and who would want to talk with these guys now?" said one, referring to the Greymouth High Court action over the Goldie well.
However, another said the amalgamation of Kaimiro and Ngatoro had always made sense and would definitely lead to lower operating costs. "Fletcher Challenge Energy tried to do the same thing almost 10 years ago, but NZOG refused to co-operate as Ngatoro was the only field they operated in New Zealand. NZOG used to capture huge operating fees from the partners and probably still do.
"Greymouth is just doing what Fletchers (Fletcher Challenge) was too chicken to do - go public and try to put the heat on NZOG, despite whatever bad publicity may come their way."
Last Thursday Greymouth principal John Sturgess said his company's plans for Ngatoro would earn the partners close to $NZ23 million and substantially extend the life of the small onshore Taranaki field, to perhaps 2018, through significantly enhanced oil and gas recovery and sales.
Greymouth, which bought Shell New Zealand's 59.57% stake in Ngatoro and took over as operator last February, proposed to transport and process all Ngatoro well fluids at the Kaimiro production station for a 15% rate of return on its risk capital, and also supply water and gas-lift/injection gas at injection pressures and quality back to the sites.
The second commentator said the proposed Greymouth processing fee was high but not unreasonable. "My bet is Greymouth would like to do the same thing to anybody who wants to pay them."
Both Bennett and Matthews added that the issues surrounding future management of the Ngatoro field - which has produced about 3.5 million barrels of oil and 7 bcf of gas since 1992 - were complex and needed full and frank discussion.
