These activities included the final investment decisions for the offshore Taranaki Tui Area and Maari oil fields, and the reserves upgrade and its imminent FID at the offshore Taranaki Kupe gas-condensate field.

Early in 2005 the Kupe partners – headed by operator Origin Energy – upgraded the recoverable reserves estimate for the central part of their offshore Taranaki field by 16.5% to the equivalent of 394 Petajoules. This, coupled with continued pre-approval work, makes a positive FID decision within the first few months of 2006 almost certain.

From 2006 to 2008, these three developments will see the New Zealand energy construction scene more active than ever before. While many of the major components – including the Tui and Maari FPSOs, and the Kupe jacket – will be imported, there will still be many opportunities for the domestic industry.

Other significant “off the field” activities included the opening of the strategic Taranaki-Waikato Maui pipeline to non-Maui gas after almost two years of negotiations, and the High Court stoush between Shell New Zealand and Todd Energy over the operatorship of several fields – principally Maui and Pohokura.

Opening up the Maui pipeline to non-Maui gas is crucial to the future of the country’s energy industry as it will allow Pohokura and Kupe gas – as well as that from any further Taranaki discoveries – to be transported to the energy-hungry north.

As well as being sizeable load centres, Auckland and Waikato have most of the country’s existing and planned large gas-fired power stations.

The December High Court dismissal of Todd’s appeal against Shell taking over from Shell Todd Oil Services as operator of the Pohokura field signalled the beginning of the end of the 50-year relationship Shell and Todd have had through STOS.

STOS,an unincorporated organisation, operates the Maui, Pohokura and Kapuni fields for Shell and Todd without holding any equity in any licences. STOS also operates two other Taranaki fields, McKee and Mangahewa, for Todd alone.

Shell NZ and fellow Maui and Pohokura partner Austrian firm OMV had earlier voted to remove STOS as operator and replace it with Shell alone. Todd Energy had challenged the validity of that decision.

Shell NZ EP commercial manager Ajit Bansal had previously told the court Shell believed it could add substantial value to the oil and gas assets in which it had major stakes – Maui, Kapuni and Pohokura – by moving away from the STOS service company structure.

In June, the High Court also rejected Todd Energy’s bid to require unanimous agreement for any third-party access to the Maui gas pipeline. The Maui Pipeline Operating Code (MPOC) subsequently took effect in October, allowing non-Maui gas to be shipped by any party through the New Zealand’s largest pipeline north to Waikato and further north.

In other trends, several downstream players jumped upstream this year to participate directly in exploration.

All major downstream gas players – Methanex New Zealand, Contact Energy, Genesis Energy, NGC Holdings, Ballance Agri-Nutrients and Mighty River Power – are now involved in upstream activities, but with mixed success so far.

Genesis has seen some positive results from the onshore Taranaki Cardiff gas prospect, with operator Austral Pacific Energy claiming it as a genuine discovery.

But analysts, say Cardiff certainly doesn’t hold the previously hoped for 1tcf of gas and that it probably only contains 215 bcf or less. They doubt whether Cardiff will flow at rates sufficient to fuel any Genesis gas-fired power station.

NGC failed to get much gas from the now-closed small onshore Kahili gas-condensate field, while gas flow rates from the Radnor field did not impress Methanex sufficiently to stop it shutting the Waitara Valley plant. Methanex mothballed the larger Motunui methanol manufacturing site a year ago.

However, Contact is pressing ahead on its own with exploring offshore Taranaki licence PEP 39493 and the Pacific Titan recently shot about 800km of 2D seismic over that permit for the Wellington-headquartered player.

Ballance and Swift Energy drilled a duster with their first shallow well, Karaka-A1. But since then Ballance has signed a 15-month gas supply agreement with NGC for its Kapuni ammonia urea plant. It is not known if there will be any more Ballance-Swift Energy joint ventures.

MRP and Swift Energy also drilled a duster with their first deep gas well, Tawa-B1, though they will be hoping for better results from Goss-A1 and Trapper-A1 that are currently drilling.

Finally, there is the “congestion” the industry is now feeling about having so many new petroleum blocks on offer.

While many applaud the recent initiatives of Crown Minerals in incentivising exploration levels, some think the Ministry of Economic Development unit is now “overloading” the industry.

They are starting to feel overwhelmed by the number of blocks already on offer and soon-to-be-offered. They say this overload is partly to blame for the apparent poor response to two bidding rounds which closed early December.

There are rumours there were no bids for the three new blocks offered under the Offshore Outer Taranaki round, and only two bids from companies already active in New Zealand for the five new blocks offered under Offshore Northland.

On February 1, Crown Minerals will formally open the 40-permit Great South Basin Blocks Offer, covering great swathes of the Southern Ocean. The round has a planned closing date of August 31.

Crown Minerals also has an onshore Taranaki blocks offer planned for the second quarter of 2006 and an onshore East Coast offer in the third quarter, with anticipated closing dates during the last quarter of 2006 and first quarter of 2007 respectively. There are also rumours of an offshore Canterbury Basin blocks offer this year.

But enthusiasm over the frontier blocks may be tempered by the trouble Perth-based Bounty Oil & Gas had trying to keep its Great South Basin permit, which Crown Minerals revoked for failure to meet work program commitments.

In early 2004, Bounty and its then PEP 38215 partners had about 2000km of 2D seismic shot over the licence. Bounty was to be free-carried through the acquisition by a farm-out to British company Electro Silica, which was to earn a 25% interest by funding the seismic.

However, it is understood Electro Silica never fulfilled its work program obligations and that the Toroa Seismic Survey data was sold to a third party.

Bounty then called in the Ombudsman's Office in its fight to keep Crown Minerals from revoking its licence. Crown Minerals would not allow a time extension to allow mapping to be completed and a well drilled by mid-2006.

Bounty maintains that Crown Minerals has been inflexible and unreasonable and is being unrealistic about the difficulties of exploring that difficult region.