This is further bad news for an industry pinning its hopes on Pohokura as the major replacement for the dwindling Maui field as New Zealand's main energy resource. Any further delays in developing Pohokura, which is already on a tight timetable, will increase uncertainty about whether New Zealand industry will be able to cope with another three winters of high gas demand.
Some companies, such as Contact Energy, are now openly questioning the urgency being given to the Pohokura and, to a lesser extent, Kupe field developments; while some industry commentators are saying politics is playing as big a part as planning in the timing and development of particularly Pohokura. The greater the delays and uncertainty, the more major gas users will fight for more expensive Pohokura gas.
Although operator Shell Todd Oil Services has not yet released any figures, it is known that results from the recent Pohokura South-1B onshore sidetrack well were not as good as hoped for, though results from the more northern Pohokura- 3 were better than expected.
It is further known that the likely development plan now involves developing the middle of the field first, followed by the more northern and more expensive extremities of the 30 sq.km field. The original base-case scenario for Pohokura involved up to three unmanned platforms, each with up to eight production wells, located about 4, 8 and 12km off the Motunui coast; with perhaps six more wells drilled from an onshore location. Now it looks as if there may only the three platforms, with no onshore wells.
The Charles River Associates (Asia Pacific) report _ submitted by the Pohokura partners to the Commerce Commission in support of their joint marketing application _ said that with joint selling, production could start in late 2004.
However, it is now generally accepted the earliest gas could come ashore would be late 2005-early 2006, by which time Maui might be almost insignificant.
The Charles River report also said Pohokura production could start at 15 Petajoules of gas a year in 2004, rising to 30PJ by 2005 and a ceiling of 70PJ in late 2007. The report also said development costs for Pohokura could exceed $NZ1 billion, with the field continuing to produce gas and condensate until around 2020.
Shell New Zealand chairman Lloyd Taylor told EnergyReview.Net that the Pohokura South-1B well, drilled from onshore but deviated about 3.7 km offshore of Motunui, was not as good as Pohokura-3, which was drilled 12km offshore.
"It is too early to be detailed, but it is clear that the 'centre of gravity' of the development has moved offshore and the first gas will, in all probability, be from an offshore wellhead platform via pipeline to an onshore gas plant.
"Obviously in doing this we'd initially target the best reservoir as seen in Pohokura-2 and Pohokura-3," Taylor said.
He added that late 2005-early 2006 for first gas was "a pretty fair estimate" as long as there were no gas marketing problems to "get in the road" of project progress.
The commerce commission decision, on whether to allow joint marketing and selling of Pohokura gas, is expected in the third week of July.
The first Pohokura shock came in late January when Todd Energy chief executive Richard Tweedie confirmed what EnergyReview.Net had earlier reported _ that the mid-case potential for the size of Pohokura field was now between 500-600 bcf, which contrasted with the last official Fletcher Challenge Energy estimate of 964 bcf of gas and 53 million barrels of associated condensate.
Taylor told the 2000 New Zealand Petroleum Conference that the breakeven point for any Pohokura development would be about 200 bcf of gas.
