Frequently asked questions
Find out answers to common questions regarding decommissioning the Tui oil field.
Has Petrofac been appointed to organise the decommissioning?
No. MBIE has contracted Petrofac to establish the current condition of the Tui wells and to determine options to demobilise the floating production and storage vessel Umuroa. This is not a contract for any decommissioning planning or services.
Has SLR been appointed for all the environmental work?
SLR has been contracted for initial consenting and planning advice for the project particularly relating to the demobilisation of the FPSO. MBIE is currently considering whether there will be additional environmental work required throughout the life of the contract that is discrete from the work SLR is undertaking.
Will majority of the tenders will be closed / limited-invitation bidders?
No. The project is adhering to the Government Procurement Rules which require all tenders over $100,000 to be openly advertised unless there is a valid reason for exemption.
Have some tenders already been completed?
Yes. The list of contracts awarded is updated regularly and are listed on the Tui Project page.
Why have some tenders already been awarded?
The project had identified particular areas of need where it was required to bring on expertise quickly; in particular, to ensure we are meeting regulatory requirements. Where possible, these processes were competitive in line with the procurement principles and were for discrete pieces of work at low value compared to the total work programme.
Is there any assurance that MBIE won’t prioritise cheapest price instead of good value / good community impact?
Yes. The process of government procurement is about achieving best public value which is not necessarily at the lowest price. Public value also includes consideration of wider outcomes, such as outcomes for Taranaki. The procurement strategy and each plan will include measures and interventions to best achieve public value.
How will MBIE ensure that taxpayer funds are well spent on this project?
MBIE is committed to ensuring taxpayer money is spent responsibly in all project areas including operationally, through procurements, and departmental spend. For example, all procurement expenditure is required to be signed off by the relevant authority based on recommendation reports.
Why doesn’t MBIE directly outsource this work to local Taranaki / New Zealand firms?
The Government Procurement Rules (Rule 3) are very clear that equal opportunity must be given to all suppliers regardless of their country of origin, degree of foreign ownership, or foreign business affiliations. This is not just a procurement consideration, but also aligns with our free trade agreements. However, we will be ensuring the concept of public value (broader outcomes) are considered in the procurement activities in terms of wider benefits which could result from the use of local firms.
Will local providers have the ability to bid for the works?
Yes. In designing the procurement strategy we are also considering how we can increase access for New Zealand businesses in line with Broader Outcomes Priority Area 1.
Does MBIE have the technical expertise to deliver this project?
This is a unique situation and the Crown does not typically become involved in operational matters. Decommissioning is a specialised function within the petroleum sector and MBIE will need to procure experienced service providers to perform this role.
What is the risk of an oil spill / negative environmental impacts during this process?
MBIE has sought expert advice on this risk and have been advised that the risk of a significant subsea leak is low. MBIE has also finalised the recruitment of a health and safety manager who will monitor the situation.
Is MBIE able to respond to an oil spill if one happened today?
Yes. MBIE has confirmed arrangements are in place for a response, should it be required.
How long will the project run for?
Indicative timelines estimate the project will run for several years. It is anticipated that the demobilisation will commence in 2020.
How will MBIE coordinate a project in Taranaki when the ministry is based in Wellington?
The Government is well versed in delivering projects across the country. As part of project planning we are integrating stakeholder engagement with Taranaki whilst adhering to guidance around COVID-19.
What role do iwi have in the project?
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. MBIE is working with Ngā Iwi o Taranaki to ensure mana whenua are represented at a project governance level and involved in key decisions. The Crown is committed to working collaboratively in partnership with Māori in line with Te Tiriti.
How much money has been budgeted for the project? Is it sufficient?
The Cabinet has agreed to fund the Tui commissioning and has allocated $155 million for the project. This figure was a best estimate of costs at the time and the actual cost may differ due to a range of factors many of which are outside of the Crown’s control.
Where are all project tenders advertised?
All open market tenders are advertised on the Government Electronic Tender Service (GETS).
What jobs/roles will MBIE be recruiting for? Where does MBIE advertise the jobs?
MBIE has had approval for a small number of fixed term roles. These will be advertised openly and also listed on the MBIE website. Additional advertisements may be utilised and the jobs will be referenced in the Tui project contracts section on the website.
I have an idea for the project – where can I send it?
The project team can be contacted at email@example.com however please note that the project team is not able to respond to all emails and is unable to accept or engage on unsolicited proposals outside of the procurement process in line with the Government Procurement Rules.
How often will you post updates on the project?
The website will be updated regularly to provide the most up-to-date information as well as contract opportunities or awards, and milestones achieved.
Who is in the project team?
The project is being coordinated by the Energy, Resources and Markets (ERM) branch, with support from other areas of MBIE such as New Zealand Government Procurement.
Will MBIE use the expertise and skills gaining by the Taranaki-based workforce that decommissioned the FPSO Whakaropai in 2008?
There is nothing to prevent companies or individuals with expertise in decommissioning to apply for MBIE roles, or tender for Tui project contracts when they are released to the market.
The project will shortly be going to the market for a contract to act as the owner’s agent for the demobilisation of the FPSO Umuroa and parties with relevant experience in comparable activities are encouraged to tender for this work.
It is important to note that the work will be procured in accordance with Government Procurement Rules which means all suppliers, regardless of where they are from, are assessed on their merits.
This contract will cover the demobilisation phase of the project only.
It is likely there will be subsequent tenders offered as the project progresses through the multiple phases of the broader decommissioning work.
Earlier this year, the Tui project team issued a Request for Information to the market to help it understand what information prospective suppliers may need in order to tender for and provide a full turnkey solution for the decommissioning of the Tui oil field. Those who assisted with this RFI included parties with decommissioning experience.
MBIE will be asking suppliers to demonstrate how they will deliver the best local outcomes to New Zealand and Taranaki through our tender processes, balanced against the size, risk, and complexity of the procurement.
This principle will also be reflected and followed through in sub-contracting arrangements.
MBIE is currently in the process of completing recruitment for key personnel to assist the project team. Once on board, it is expected that these personnel will gather further information about projects that are relevant to Tui, including, but not limited to, the Whakaropai decommissioning.