Sydney-headquartered Horizon said its 10% share (excluding weather contingency allowances) had climbed from $36.5 million at the time of the financial investment decision in October 2005 to the present $41.9 million.
Horizon said the cost increase was due almost entirely to a revised erection method to raise the wellhead platform (WHP) tower, using creeper jacks rather than a crane, and the cost of the work acceleration plan to maintain the WHP schedule.
Last month, the capital cost of the more northern offshore Taranaki Tui Area oil fields development rose an additional $20 million, taking total development costs to $245 million.
Tui operator Australian Worldwide Exploration said this was because of slower than anticipated drilling rates and the lengthening of the Tui-2H horizontal production well that intersected a more extensive oil column than predicted.
Horizon said at the end of March, the Maari project was about 39% complete, with the critical sail-away window for the WHP still expected in September. Work on the WHP was 54% complete.
Horizon also said work on the floating production, storage and offtake vessel Raroa was 55% complete and on schedule, with good progress on the mooring and process module fabrication.
Repair and life extension work on the vessel, in the Jurong yard in Singapore, was well advanced, including the removal of asbestos, before the arrival of the process module in May.
Development well construction engineering had seen significant progress on all fronts, including mud engineering, conductor installation and the workover unit that would be permanently located on the WHP.
Horizon added that there were now shore-based facilities in New Plymouth for the duration of the project.
The jack-up Ensco Rig 107, which was to drill an appraisal well in the nearby Manaia structure as well as the Maari development wells, was now not expected on location before next March, some three months later than first scheduled.
“The joint venture is examining ways of mitigating the effects of this delay and the uncertainty in timing of the arrival of the rig, to minimise any resultant delay to the timing of first oil, currently scheduled in April 2008.
“One clear option will be to turn the development wells to the tanker progressively as they are completed, given that the WHP and FPSO are planned to be installed by March,” said Horizon.
Total 2P (P50) recoverable reserves in the Maari petroleum mining licence PMP 38160 are estimated to exceed 50 million barrels of crude, with another 10-20MMbbl upside potential. Total gross initial oil production rate is expected to be about 35,000 barrels of oil per day (bopd), with production continuing for about 10 years.
Chief executive Brent Emmett said high oil prices put pressures on development costs and schedules as companies competed for services and materials.
“At Maari the project team has done a formidable job, so far, of managing forecast costs to completion within 15% of the budget that was set in 2005 and maintaining schedule for installation of the platform and FPSO in the coming summer.
“We look forward to the very significant cash flows that Maari will begin to generate next year,” he added.
The Maari partners are operator OMV NZ (69%), Horizon Oil (10%), Todd Petroleum Mining (16%) and Cue Energy Resources (5%).
Weighing possibilities in Beibu Gulf
In China, Block 22/12 (Beibu Gulf) operator Roc Oil and its partners were continuing on the Wei 6-12S development plan, with additional reservoir simulations being run aimed at optimising recoverable reserves.
This indicated the likelihood of seven vertical wells being required to drain reserves and a likely field initial rate of 20,000-25,000bopd, said Horizon.
The remaining critical decision was whether processing facilities would be located on the platform or the storage vessel. Roc was also investigating ways to reduce development drilling costs.
The partners aimed to submit a field development plan to the Chinese Government by mid-2007, with Roc currently evaluating tenders for a four firm well, plus two optional well, drilling program, expected to start at the end of this year.
Stanley gas on the table
In Papua New Guinea, Horizon was continuing discussions with PNG Sustainable Energy regarding commercialisation of the Stanley gas discovery in PRL 4.
Reprocessed seismic over Elevala in PRL 5 and new mapping showed the potential for a sizeable gas and condensate resource (50 barrels of condensate per million cubic feet of gas), which underlined the need to develop a scheme for commercialisation.
In Thailand, Horizon and its G10/48 and G11/48 partners were focusing on acquiring a total of 5500km of 2D seismic over each block, with the aim of drilling three wells in G10/48 and two in G10/48 next year.
