Tui and Mangatoa are both offshore Taranaki blocks.

Wellington-headquartered NZOG said it had not been able to attract additional partners for the PEP 38478 licence that contains the Mangatoa area off north Taranaki and that co-holder Origin Energy Resources had also withdrawn from the licence.

NZOG general manager Gordon Ward said the attraction of possibly a large gas find at Mangatoa was offset by the significant risks associated with obtaining adequatee gas flows from the tight reservoir.

The company had been keen to see Mangatoa, which it had earlier said could contain up to 3 tcf of gas, drilled but was not prepared to over-extend itself on a single prospect with costs for an initial well likely to exceed NZ$20 million.

The company would, however, continue to drill in other parts of offshore Taranaki, including the Gamma and Taitapa prospects in PEP38484, west of the Kupe field, next year.

Ward added that despite the Tui Area partners not yet having made a final investment decision (FID) for the PEP 38460 fields, they had already contracted Diamond Offshore Drilling Company's semi-submersible rig Ocean Patriot to drill the planned four production wells next year. The tight world market for offshore rigs had caused this move ahead of the FID.

The venture had also secured an option to drill another three wells using the Ocean Patriot and it was likely that at least two wells would be drilled into Kapuni F sand structures close to the Tui development.

Ward added that contractor proposals for a floating storage and offloading facility (FPSO) for the Tui Area would be evaluated next month.

While not yet finalised, total costs were likely to exceed the US$120-150m early estimates, reflecting heavy demand for products and services in the worldwide EP industry.

PEP 38460 partners are: operator Transworld (via New Zealand Overseas Petroleum (45%), NZOG (via Stewart Petroleum) (12.5%), AWE New Zealand (20%), Mitsui E&P New Zealand Limited 12.5% and Pan Pacific Petroleum (via WM Petroleum) (10%).