By Neil Ritchie
NEW ZEALAND-focused offshore oil and gas companies are concentrating on maintaining or even increasing existing production and continuing relatively low cost activities such as seismic surveys and subsurface studies.
They are riding out the current crude price drop and associated global oil oversupply by carefully examining forward work programs and the economics of possible further drilling in two or so years.
But it’s not all doom and gloom.
Maui field operator Shell Todd Oil Services (STOS) has delivered it second fillip this summer by applying to the Environmental Protection Authority – on behalf of the partners Shell Exploration NZ, Todd Energy and Austrian company OMV – for all the marine resource consents necessary to continue operating the field into the 2030s.
Its EPA application also bids to drill up to another 12 sidetrack wells from the Maui A platform and up to 10 more sidetracks from the Maui B platform, starting from the summer of 2017-2018 at the earliest.
The government has introduced emergency legislation changing the Exclusive Economic Zone (EEZ) and Continental Shelf Act to allow existing offshore production facilities to continue operating if any appeals are lodged against their operations while they seek to renew their respective petroleum mining permits.
This EEZ amendment is primarily aimed at the Maui partners, whose mining permit PMP 381012 is due to expire on 28 June, and whose application to the newly established EPA for continuing marine resource consents is unlikely to be approved in that time.
Late last year STOS announced a “discovery” at the Ruru-3 well on the southeastern edge of the offshore Taranaki Maui field, and now nearby Kupe gas field operator Australian major Origin Energy and its partners – New Zealand Oil & Gas, Genesis Energy and Japan’s Mitsui Corporation – have announced encouraging early results of tests done during December and January.
Early test results are positive, with increased gas and condensate rates and higher shut-in wellhead pressures.
As well, initial analysis of logging results indicates the water contact has not moved as much as modelling predicted, which means ultimate recovery from existing reservoirs may be higher than forecast to date.
In addition, the higher wellhead pressures indicate that previously untapped gas reserves may be available for future development.
However, these results require further analysis and production data measurements to provide the certainty required to update recoverable reserves. This work should be completed by this June.
The Kupe partners have also reached agreement to maintain the field’s increased gas production capability. Production capacity has been elevated by about 10 per cent, up to 77 terajoules per day, since the first half of 2012, with actual production averaging between 63-65 terajoules per day.
In other offshore news, American veteran oilman Randall Thompson is hoping to take over as operator of the sole Deepwater Taranaki basin exploration licence PEP 38451 again, following the exit late last year of former operator and major stakeholder Anadarko Petroleum, as well as the departure of small Dutch-registered company Discover Exploration.
In a bold move, his company Randall C. Thompson LLC wants to pick up Anadarko’s 53% stake and Discover Exploration’s 10% holding. Hyundai Hysco, a subsidiary of Hyundai-Kia Motors Group, South Korea’s second largest corporation, is retaining its 32% interest.
If successful, the remaining partners’ immediate focus will be attracting a new farm-in partner or partners, and switching future exploration effort from the already drilled Romney Prospect to the Merino “trend” in the southwestern part of the licence along the Challenger Plateau.
The Denver-based veteran is already in discussion with several contractors currently acquiring seismic data in offshore New Zealand waters regarding acquiring additional data for Randall C. Thompson LLC, hopefully later this summer or early autumn.
Another of his companies, Global Resource Holdings LLLP, was the initial operator for four years from being granted the permit in late 2006.
New Zealand now has only one offshore drilling unit operating – the jack-up Ensco Rig 107 that is continuing its development campaign at the Maari-Manaia oil field for operator Austrian giant OMV, Todd Energy and listed Aussie juniors Horizon Oil and Cue Energy Resources.
The Mighty Servant 1 heavy-lift ship was in New Zealand waters in late February to take the semi-submersible rig Kan Tan IV back overseas for its next assignment.
Finally, the Supreme Court, this country’s highest judicial body, has refused fisherman Elvis Teddy leave to appeal his case following his disruptive protest against an offshore seismic survey vessel working for Brazilian state-owned oil giant Petrobras exploring off the East Coast during 2011.
He allegedly deployed buoys tied together with rope, and trailed tuna fishing lines over the stern of his boat, the San Pietro, while in the path of the Orient Explorer.