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Tui area oil fields commercially viable, partners report
22 November 2004 - The Tui area oil discoveries, involving the Tui-Amokura-Pateke oil fields in offshore Taranaki, have been determined as commercially viable to develop by the PEP 38460 joint venture partners.
Two of the PEP 38460 partners New Zealand Oil & Gas Ltd and Australian Worldwide Exploration Ltd have reported the viability of the Tui area fields, north west of the Maui field. The 38460 permit is operated by Transworld subsidiary NZ Overseas Petroleum Ltd.
NZOG said the decision by the joint venture is based on a proved and probable reserve base in the range of 20-30 million barrels of recoverable oil and a development concept consisting of three or four subsea wells tied back to a floating production, storage and load-out vessel, or FPSO.
Capital costs for the subsea and subsurface components of the development are expected to be in the range of US$120 million to US$150 million (approx NZ$170 million to NZ$220 million). If an FPSO were to be purchased rather than leased, additional investment would be required.
The joint venture has approved a budget for commencement of initial engineering and design work, the Front End Engineering and Design (“FEED”). This should enable the venture partners to make a final financial commitment to project development by June 2005. Assuming the timely receipt of regulatory approvals, first oil is planned for mid 2006.
The oil is all of high quality and is expected to flow at very good rates from the excellent quality Kapuni F sand reservoir.
Tony Radford, executive chairman of NZOG, said “It is pleasing we are now underway with steps that will hopefully lead to an off-shore oil development".
“While the development concept for the fields is straightforward it needs to be stressed that a final investment decision will not be made until we have completed the engineering studies and secured a suitable production facility. This work is now underway moving towards a target date for project sanction in mid-2005”.
Bruce Phillips, managing director of AWE, said his company was very encouraged by the drilling success in the Western Taranaki Basin, where oil discoveries at Tui, Amokura and Pateke have been made over the past 18 months.
Participants in PEP 38460 are: NZ Overseas Petroleum 45%, AWE New Zealand Ltd 20%, Mitsui E&P New Zealand Ltd 12.5%, NZOG (via wholly-owned subsidiary Stewart Petroleum Co Ltd) 12.5%, WM Petroleum Ltd (a Pan Pacific subsidiary) 10%.
