“The outcome is a major step towards securing near and intermediate term gas supply and ensuring a smooth transition to new supply sources. The forbearance of Energy Minister Pete Hodgson in the protracted negotiations is noteworthy,” one commentator told EnergyReview.Net.
“However, questions remain about the dynamics of the Maui JV and its decision making process in respect of further expenditures aimed at maximising gas recovery.”
It is unclear whether the Kapuni D sands within the northern Maui A lobe, known as “AD”, and the Ihi prospect, perhaps 90PJ of stranded carbon dioxide-tainted gas - are included in the underwritten quantity of gas sales or regarded as additional reserves.
Last year’s Independent Expert’s determination of economically recoverable reserves included approximately 55PJ of production from the currently untapped AD sands which, according to the partners Shell, OMV and Todd, cannot be accessed from existing platform wells.
It is also unclear what level of commitment the Maui JV has to further capital expenditure and when exploration of AD-Ihi may start.
However, there are already rumours that the Maui partners Shell NZ, OMV and Todd Energy may utilise the Ocean Patriot to drill Ihi and-or the “AD” sands after Tap Oil has finished its probable two-well program later this year.
Last week Tap Oil announced it was bringing the semi-submersible rig from South Africa to drill the Tawatawa-1 in PEP 38333 off the Wairarapa. It is likely Tap will also use the rig to drill Galleon South-1 in PEP 38259 off Otago.
After several late night sessions this week, the Maui partners, Methanex, Contact Energy, NGC and the Crown on Wednesday announced they had finally agreed on how to divvy up the remaining contracted gas reserves and any new gas from the offshore Taranaki field.
The Maui partners have undertaken to deliver 367PJ of gas to the Crown from January 1, 2003 to June 30, 2009. Given demand since the start of last year that means there is only about 216PJ of gas left at old contracted prices.
They also said additional gas might be available, based on results of an unspecified reserves report, likely to the encouraging STOS 2003 review which is believed to have indicated potential upside to the Independent Expert’s report.
A total of 40PJ of additional gas is to be reserved for Methanex, though only 20PJ is a firm commitment and the other 20PJ subject satisfactory field reserves to sustain additional sales.
Further, the parties have agreed to waive past disputes and claims against each other, meaning the effective wiping of any claims against Methanex, which the Independent Expert found had used about 77PJ more than its redetermined entitlements.
OMV spokesman David Salisbury said the AD-Ihi matter had been resolved, though he would not say what the deal involved. “AD Ihi is an issue encompassed in the agreements, but the outcome is confidential,” he told ERN from Wellington. He was unaware of any plans to use the Ocean Patriot.
A second comentator wondered why this matter had taken so long to resolve, given that the parties had last June agreed the basis of a heads of agreement, with a view to concluding a binding HOA last August.
“In the finish it’s incredible that so little was gained or lost by anyone in the space of the extended negotiations and how much time and resources had to be sunk into it,” he told ERN.
Meanwhile, the depleting Maui field and no new significant onstream discoveries mean Kiwi gas production continues to slide.
Statistics New Zealand yesterday said gas production for the year ended March 31 was only 179 Petajoules, 25.7% lower than the previous year and 29.7% lower than in 2001-02 - the last time Maui production was ramped up to help alleviate a looming winter power crisis.
