Tui Project: decommissioning the Tui oil field

The NZ Government has commenced work to manage the Tui oil field assets and plan for decommissioning of its wells in the wake of the financial problems affecting the permit operator Tamarind Taranaki Ltd.

The Crown is committed to ensuring that the field is decommissioned in the right way, in accordance with the law and good industry practice. 

The Crown is committed to comply with all environmental protection standards and other regulatory requirements in its management of the Tui oil field. The Crown is working closely with the various regulatory agencies to ensure that the assets are being managed appropriately.

There is regulation in place to ensure that offshore decommissioning is completed in an appropriate way.  This occurs across a number of regulators and government, including the Ministry of Business, Innovation and Employment, the Environmental Protection Authority, Maritime New Zealand and WorkSafe New Zealand. 

Environmental and safety regulation is administered by the Environmental Protection Authority, Maritime New Zealand and WorkSafe while MBIE is taking the lead on dealing with the Tui assets, and keeping the Minister of Energy and Resources closely informed of developments.

MBIE is engaging closely with Te Kāhui o Taranaki (Taranaki Iwi) to review details of the decommissioning plan as it develops, and is keeping other iwi groups informed.

This page will be regularly updated to ensure the latest information on the Tui Project is available.

Current status

(As at 29 May 2020)

The liquidators of the Tamarind companies have disclaimed the Tui assets to the Crown and the Crown has commenced work to manage the assets and plan for decommissioning. 

MBIE has contracted Petrofac, a company that specialises in the operation and decommissioning of petroleum facilities, to establish the current condition of the Tui wells and to determine options to demobilise the floating production and storage vessel Umuroa.

Once that work is available, MBIE expects to work with BW Offshore, owners of the FPSO Umuroa, to determine the best way forward.

The FPSO Umuroa is currently moored over the Tui oil field and connected to its wells via flowlines as shown below.

tui permit image
Diagram of the FPSO Umuroa connected to Tui oil field wells via four main flowlines.

The decommissioning process

The decommissioning of the Tui field is expected to be conducted in two phases; the demobilisation of the FPSO Umuroa coupled withworks to ensure that the subsea assets are left safe and secure, followed by longer-term plugging and abandonment of the wells and permanent removal of the subsea infrastructure.

It is expected that the demobilisation phase of decommissioning will commence in 2020.

The second phase of work requires detailed planning and environmental approvals.  It will also likely require an appropriate drill rig (or Light Well Intervention vessel) to be located in New Zealand. It is anticipated the decommissioning phase will take several years.

The total cost of the decommissioning work will depend on a number of factors, and MBIE needs to obtain a range of advice from technical specialists to determine this.  Until that information has been received it is premature to assess, with any confidence, the costs associated with decommissioning but best estimates available currently assess Tui Oil field decommissioning costs at approximately NZ$155 million.

Tamarind Taranaki Ltd (in receivership and liquidation)

Tamarind Taranaki Ltd – permit operator of the Tui oil field – was placed in receivership and liquidation in December 2019.

Its parent company, Tamarind Resources Private Limited (Singapore) went into receivership in March 2020 and into liquidation in April 2020.

The Crown is an unsecured creditor in respect of Tamarind Taranaki Ltd (TTL).

The liquidators of the Tamarind companies have disclaimed the Tui assets to the Crown, but the petroleum mining permit currently remains with the liquidators.

Treaty partners and stakeholders

The Crown is committed to continued meaningful engagement and consultation with Te Kāhui o Taranaki (Taranaki Iwi) and other Treaty partners throughout the entire decommissioning process.

The ultimate decommissioning of the Tui oilfield will entail the removal of the subsea infrastructure, with the challenges arising from details of how this is best achieved. In the short-term, efforts are also underway to enable the FPSOUmuroa to demobilise and depart New Zealand.  Te Kāhui o Taranaki (Taranaki Iwi) are aware of the complexities of the demobilisation and decommissioning and are actively contributing to ensure the infrastructure is safely removed and in a timely manner.

Stakeholders, including the oil and gas industry, service companies, local government, non-government organisations and other interested parties will be kept informed of developments and consulted where applicable.

Tui project contracts

MBIE does not have staff who are specialists in the decommissioning of offshore petroleum assets so it needs to procure external technical advice to perform this role.

The decommissioning will involve multiple stages, from monitoring, demobilisation, through to decommissioning. The work will be subject to a tender process and will be procured using the usual tender mechanisms for NZ Government contracts. It is likely that a number of tenders will be offered during the multiple phases of the decommissioning project.

An initial contract has been awarded by MBIE to assess the options for demobilising the FPSO and procurement is underway for specialist consenting/planning advice and legal support to assist with Tui oil field demobilisation activity.

Applications have closed for a health and safety compliance manager for the Tui assets.

A lot of high quality and detailed decommissioning planning work has already been conducted by the previous owners of the Tui field.

MBIE expects that the eventual decommissioning of the Tui assets will be fully outsourced by way of a transparent open market procurement process, and the successful contractor will then be responsible for delivering the finished product.

When it is available, details of tenders related to the Tui decommissioning work will be available here:

NZ Government Electronic Tender Service (GETS)

Procurement information will be updated on this page as new opportunities are offered.

Contact

For more information on the Tui decommissioning process please email decommissioning@mbie.govt.nz

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