Wellington-headquartered NZOG said yesterday afternoon that Tui project design work was largely completed during the September quarter.
In addition, project construction was well advanced, particularly for the floating production, storage and offtake vessel being refurbished by Norwegian company Prosafe in Singapore.
Taranaki Maori recently renamed the FPSO as the Umuroa, which loosely translates as “long energy oven”.
“The development is on target to meet the projected mid-2007 date for first oil production,” NZOG said.
The company also said the Tui Area reservoir development plan had been finalised and that the partners were reviewing operator Australian Worldwide Exploration’s proposals to increase the revised Tui construction budget from the presently approved $204 million to $225 million, including contingencies.
NZOG said the first Taranaki task for the semi-submersible Ocean Patriot rig – currently drilling the Cutter-1 well in PEP 38259 off Canterbury – should be to drill the near-field exploration well Tieke-1 to test the Tieke prospect, about 7km from the proven Tui Area fields and within the Tui Area petroleum mining permit PMP 38158.
Tieke-1 should be drilled to maximise the rig availability, and the coordination with subsea installations. But it will be late November before the partners make a definite decision regarding Tieke.
The Tieke prospect had the potential to deliver up to a further 15 million barrels (MMbbl), in addition to the Tui Area 2P (proven and probable) oil reserves of 27.9MMbbl.
“A Tieke discovery could significantly enhance the Tui Area project reserves,” said NZOG.
While it had been expected the first exploration well in the Hector Prospects and Hector South Sub-block (PEP 38483) would be drilled this year, that had now been deferred in favour of giving priority to potentially drilling the Tieke-1 prospect.
“The Hector-1 well is therefore now likely to be drilled after the Tui development wells, which would therefore be around June 2007.”
The Hector prospect was a dip-closed structure at the Eocene-aged Kapuni C sands level (as mapped on a 2005 3D seismic survey) that had the potential to hold at least 50-60MMbbl of recoverable oil.
At the end of September, NZOG said it had used $10 million of its $25 million Tui development cash advance facility.
NZOG is involved in two development wells in the Tui oil pool, one in each of the Amokura and Pateke pools, and three exploration wells – Tieke and Taranui in PMP 38158, and Hector.
Kupe
NZOG will also be involved in five development wells in the offshore Taranaki Kupe gas project.
The company said the $200 million “alliance contract” between Kupe operator Origin Energy and global construction specialists Technip for the overall development of the $NZ980 million ($A858 million) Kupe project incorporated shared objectives and risk-reward arrangements.
The contract involved Origin and Technip executives leading a team sourced from both companies and covering the design, engineering, procurement, installation, construction, pre-commissioning and commissioning phases of the project.
NZOG was evaluating bank financing proposals for funding its 15% equity in the Kupe project.
The Ensco jack-up Rig 107 has been contracted to drill three development wells in the central field area of the Kupe field from mid-2007 and commercial production is expected to start by mid-2009, delivering around 20 petajoules per annum of sales gas – about 15% of New Zealand’s current annual gas demand.
NZOG said its involvement in the Tui Area and Kupe campaigns – a program of three offshore exploration wells and seven development wells – was a highlight for the 2006-07 period.
The Tui (PMP 38158) partners are operator AWE NZ (42.5%), Mitsui E&P NZ (35%), NZOG (12.5%) and Pan Pacific Petroleum (10%).
The PEP 38483 partners are operator AWE NZ (44.317%), NZOG (18.864%), Mitsui E&P NZ (22.728%) and Pan Pacific (14.091%).
The Kupe partners are operator Origin Energy (50%), Genesis Energy (31%), NZOG (15%) and Mitsui E&P NZ (4%).
