Origin told the ASX this morning that Ensco had won the contract to drill three development wells in the field off south Taranaki. It did not disclose a contract price.
The Ensco contract includes options to drill up to three additional wells elsewhere in the Kupe field or in other licences, as well as cancellation provisions in the unlikely event that the possible A$800 million Kupe project does not proceed.
The Ensco 107 rig, which was recently commissioned and launched in Singapore, will complete three projects in South East Asia before mobilising to New Zealand in the first quarter of 2007.
The Kupe drilling program is planned to start in the first half of 2007 and take about six months.
“The award of the drilling contract is a key project milestone. We’re pleased to have secured a first-class rig that will be well tested in the region prior to its arrival in New Zealand,” said Origin’s executive general manager for major development, Andrew Stock.
He said bids had also been received for the construction of the onshore Kupe production station and associated pipelines – and these were being evaluated.
“The level of interest shown in the onshore component from international contractors is also very promising,” he added.
The Kupe partners now expected to reach a final investment decision during the first half of 2006. Given project approval, commercial gas and liquids production was expected to start sometime during 2008.
Stock said a revised development budget would now be completed.
Last year the Kupe partners upgraded their recoverable reserves estimate for the central part of the field by 16.5% to the equivalent of 394 petajoules. Total revised 2P estimates of different products are now approximately sales gas 281PJ (281 PJE), LPG 627,000 tonnes (31 PJE), condensate 14.7 million barrels (82 PJE). These figures include production from a basal oil leg.
Expected production is around 20PJ per year of sales gas, together with annual condensate and LPG production starting at 1.7 million barrels and 45,000 tonnes respectively.
The Kupe partners are: Origin Energy Resources (Kupe) (operator, 50%), Genesis Energy (31%), New Zealand Oil & Gas Limited (via subsidiaries, 15%) and Mitsui E&P (New Zealand) (4%).
