Final investment decisions have already been made for the Pohokura gas-condensate, and Tui Area and Maari oil fields, while FID is expected for the Kupe gas-condensate field in the first half of this year.
Development of the US$600 million, Pohokura gas-condensate project – the most northern of the four fields – is progressing well. First commercial flows from the 900 bcf field (with 50 million barrels of associated condensate) are due late this year.
The Ensign Rig 41 is nearing the end of its onshore-offshore drilling program – three deviated production wells and a water injection well. The Ensco E56 jack-up rig is due in NZ waters in late February-early March for the program in the more northern part of the field.
This second stage of the development will involve installating the platform jacket, topsides and conductors for the single offshore, unmanned wellhead platform that will sit in 32m of water off the Motunui coast. Six offshore production wells are scheduled to be drilled from the platform.
Shell Todd Oil Services operates the Pohokura permit PMP 38154 on behalf of partners Shell NZ, Todd Energy and OMV.
The proposed development timetables for Tui, Maari and Kupe will dovetail nicely with each other and with the remaining Pohokura development work .
First oil from the 27-million-barrel Tui Area is scheduled from mid-2007, while the Maari partners hope to have signed the major development contracts for their 50-million-barrel field soon, to enable first oil from March-April 2008.
The Kupe partners are aiming for an FID during the first half of this year to ensure their US$540 million project can be developed over the following two years, with first hydrocarbon flows sometime in 2008.
The US$204 million Tui Area project will be New Zealand's first stand-alone offshore oil development and will see initial flows of up to 50,000 barrels of oil per day from the Tui, Amokura and Pateke fields. Recoverable oil is estimated at 27 million barrels.
The partners have a 20-year mining licence, PMP38158. They foresee 5-7 years of commercial production from the Tui Area fields, another 5-7 years from satellite prospects that could be easily tied into the Tui development, and perhaps a few more years of production from other parts of the permit.
The joint venture has secured the Ocean Patriot semi-submersible rig for a four-well Tui development program from the last quarter 2006, with an option to drill up to three exploration wells.
In addition, the Tui JV must drill two other exploration wells in PMP38158 over the next two years.
A project management team – based in Houston and run by Alpha Petroleum Services – is handling drilling design and planning, equipment procurement, FPSO specification and process design.
The Tui drilling team should start assembling in New Plymouth from July, while the installation team should start assembling from October.
Prosafe Production Services recently started modifying a tanker into a FPSO in Singapore for the Tui Area.
It will operate it for a fixed five-year, initial-term US$178 million contract, with options for five one-year extensions.
The FPSO is designed to handle up to about 120,000 barrels of liquids per day, with oil storage capacity exceeding 700,000 barrels, to maximise ultimate oil recovery. This will allow different sized offtake oil tankers to be used.
It is scheduled to arrive in Taranaki waters during the second quarter of 2007 to receive first shipment of the light sweet crude.
The partners will recoup their development investment within the first four months of commercial production, even if oil falls to US$40.
The Tui partners are operator Australian Worldwide Exploration (through subsidiary New Zealand Overseas Petroleum), New Zealand Oil & Gas, Mitsui EP and Pan Pacific Petroleum. Tui will be AWE’s first major development operational role.
Meanwhile, the Maari partners are progressing their US$360 million offshore Taranaki development, with first oil from the 50-million barrel field scheduled for March-April 2008.
Operator OMV says the production plateau rate from Maari, south of Maui, should be about 35,000 bopd, with 2P field reserves estimated to be about 50 million barrels. Field production is expected to exceed 10 years.
The Maari partners have a 22-year mining licence (PMP 38160) and have retained rights to explore the nearby Manaia discovery.
The main reservoirs at Maari field, some 80km off the south Taranaki coast, are the Moki formation, plus the Mangahewa reservoir.
Minority partner ASX-listed Horizon Oil has said the shallower and deeper zones have not yet been fully appraised and there is an additional six million barrel upside potential from the Manaia prospect to the southwest.
All the major work scopes have been tendered and tender evaluation is almost complete. Development contracts are expected to be awarded soon.
The scoped Maari development comprises a normally unmanned wellhead platform, an FPSO, and five production and three water injection wells.
All wells will be drilled from a common seabed location, with the wellheads on the fixed platform for easy access during the field's life.
The platform will have spare slots for future platform wells and the facility to tie-back any satellite fields.
Australia’s Clough Limited has been awarded an A$170 million contract for the Maari wellhead platform engineering, procurement, construction and installation activities.
Clough has already started the work, aiming to meet the installation target date of November 2007.
As well, letters of intent have been executed with Tanker Pacific Offshore Terminals, for the supply and operation of the FPSO, and with Ensco Oceanic International, for development drilling.
The Maari partners are operator OMV New Zealand, Todd Energy, Horizon Oil and Cue Energy.
At the US$540 (A$800) million Kupe project, operator Origin Energy recently awarding the three-well development drilling contract for the offshore field to Ensco Oceanics International.
The contract includes options to drill up to three additional wells elsewhere in the Kupe field or in other licences. The drilling program is planned to start in the first half of 2007 and take about six months.
Origin is also evaluating bids for the construction of the onshore Kupe production station and associated pipelines.
Commercial gas and liquids production is expected to start in 2008.
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 about 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 operator Origin, Genesis, NZ Oil & Gas (via subsidiaries) and Mitsui E&P.
