Tui, Amokura and Pateke Reserves Area Oil Project by New Zealand Overseas Petroleum Limited

Three oil fields – Tui, Amokura and Pateke reserves located in PEP 38460, the offshore Taranaki basin, New Zealand – are being developed in phases under the Tui Area Oil Project. Work on the $204 million project began in fourth quarter of 2005 and is scheduled for completion by the first quarter of 2007. The operator of the project is New Zealand Overseas Petroleum Limited and the contract for the project was awarded to Prosafe Production Services Pty Ltd. Australian Worldwide Exploration Ltd (AWE) is responsible for the funding. During 2003-04, a joint venture of AWE New Zealand Pty Ltd and New Zealand Overseas Petroleum Limited discovered the three adjoining oil fields 40km from the coastline. New Zealand’s Ministry of Economic Development (MED) approved the final terms of the petroleum mining permit (PMP 38158). The Tui Area Oil Project will supply the Asia Pacific region including refineries on Australia’s east coast. The light sweet Tui Area oil is very similar to that of reservoirs at Maui field, offshore Taranaki, and Bass Strait. Though the output from the four wells is expected to dwindle gradually, the payback on the initial capital will be quite high. New discoveries on the nearby reserves will also result in additional gain for the project. According to projections, the recoverable oil reserves in the three fields will be 26.8 million barrels and the initial outflow is likely to be 50,000bopd. The development works includes the drilling of four wells 120m deep into the subsea. The wells will be connected to a Floating Production, Storage and Offloading vessel (FPSO). Due to a shortage of suitable offshore drilling rigs, a contract was awarded to Diamond Offshore for the use of Ocean Patriot semi submersible rig. Other prospects, including Tieke and Taranui, have been identified within the Tui area on the existing 3D seismic grid. According to AWE, the major plan will also include the development of five wildcat exploration wells beginning from the third quarter of 2006. This exploration programme will be carried out in conjunction with the four development wells. As per the MED approval, the drilling operation on two exploration wells will be completed within two years from the date of permit. This will be the subject to the prior agreed rig day rates and the option slots on Ocean Patriot. The works on subsea fabrication and installation began in the fourth quarter of 2005. The drilling operation on the four wells will begin in the fourth quarter of 2006 and scheduled to be completed within six months. An FPSO vessel will be used for maximising the oil recovery. Its oil storage capacity will be 700,000 barrels and the unit has been designed to cater to different types of offtake oil tankers. The four wells will be linked to the FPSO which will handle 120,000 barrels of oil per day. Under the charter arrangement, Prosafe is responsible for the FPSO operation for an initial period of five years. The contract value is $178 million. The stakeholders of Tui Area Oil Project and PEP 38460 JV are AWE New Zealand Pty Ltd (20%), New Zealand Overseas Petroleum Limited (45%), Mitsui E&P New Zealand Ltd (12.5%), NZOG via Stewart Petroleum Company Ltd (12.5%) and WM Petroleum Ltd Pan Pacific (10%).

Tui, Amokura and Pateke Reserves Area Oil Project, New Zealand, New Zealand Overseas Petroleum Limited, Asia,