NZX-listed NZOG says in its June quarterly report that the Tui PMP application was one of the highlights for the three months.
Other milestones included the tendering of contract prices for key Tui project components and the issuing of construction tender documents for the Kupe gas-condensate field to the south of Tui.
Contractor proposals for a floating storage and offloading (FPSO) facility for the Tui fields (Tui, Amokura and Pateke) were being evaluated, with engineering work scheduled for completion later this month.
Capital costs were likely to exceed the US$150 million previously estimated, reflecting heavy demand for products and services in the industry.
Initial Tui Area production was expected to exceed 30,000 barrels of oil per day (bopd), which should result in a rapid investment payback based on oil prices of US$35 per barrel, and an even greater payback should oil prices continue to be US$58-60. The final investment decision for Tui was expected this September or October.
In addition to the Tui development wells, the already contracted Diamond Drilling Ocean Patriot semi-submersible rig was expected to drill at least two of several nearby oil prospects - Tieke, formerly called Weka, Oi, Matuku, Taranui and Taranui South. Discoveries at any of these prospects could be tied into the initial Tui development.
NZOG was carrying out its own assessment of the prospectivity of these prospects, as well as evaluating recent 3D seismic data over the northern extension of the Pateke (Tui Area) oil field.
Tieke, updip from Tui, was considered a more likely oil candidate and had an unrisked potential of 25 million barrels of oil at the Eocene-aged Kapuni F sands level, while Taranui had unrisked potential of 40 million barrels at the F sands.
Kupe engineering work was proceeding, with the current schedule being to have formal project approval in place by the second quarter of 2006.
During the quarter, tenders were called for platform fabrication, offshore installation and drilling. Detailed design and tendering for the onshore gas production facility was also underway with selected international companies.
These contracts were expected to be awarded during the last quarter of 2005, with all project approvals in place by the first quarter of 2006.
But the tight international petroleum and resource industries had the potential to delay development schedules and the partners were investigating strategies to mitigate this.
NZOG also said it had decided to drill the Taitapa prospect in the West Kupe PEP 38484 licence. Taitapa was a fault-bound structural closure about 24 km south of the Kupe central field area believed to have potential reservoirs at Miocene-aged and Cretaceous levels.
Meanwhile, processing of the April 3D seismic survey of the Hector area in PEP 38483 was expected to be completed later this month, with interpretation and detailed evaluation enabling a drilling decision to be made.
The Hector area was considered highly prospective due to a combination of favourable reservoir development in the Kapuni F sands and proximity to hydrocarbon “kitchen” sourcing these reservoir sands.
Also, NZOG had decided to drill an exploration well in the Felix prospect (PEP 38729), with the primary reservoir target being the Kapuni C sands, and was in the process of securing a jack-up rig and farm-in partners ahead of drilling.
The PEP 38460 (Tui Area) partners are: operator Transworld (via New Zealand Overseas Petroleum (45.0%), NZOG (via Stewart Petroleum) (12.5%), AWE New Zealand (20.0%), Mitsui E&P New Zealand Limited 12.5%, Pan Pacific Petroleum (via WM Petroleum) (10.0%).
The PML 38146 (Kupe) partners are: operator Origin Energy (50%), NZOG (15%), Genesis Energy (31%), and Mitsui E&P (4%).
