Oil and gas companies are still testing the waters offshore New Zealand when it comes to production, and little has been done off the islands in the exploration arena.

New Zealand Petroleum and Minerals (NZP&M), however, is expecting exploration activity to increase, according NZP&M General Manager James Stevenson-Wallace.

“New Zealand is a frontier nation and many of our operators are exploring rather than producing. Frontier oil and gas exploration is a long-term commitment, with projects often taking upwards of 15 years from permitting to first production. The current oil price is widely expected to rebound in the medium term,” Stevenson-Wallace told OE.

New Zealand is also relying on block offers, as far back as 2013 to increase exploration offshore the country.

“Over the past three years we have positioned New Zealand as an investment destination. We’ve done the necessary groundwork to start to build our collective understanding of New Zealand’s potential,” Stevenson-Wallace said.

In March, the country released its 2015 Block Offer, with a total of 425,206sq km consisting of four offshore areas for tender: Taranaki (53,253sq km), Northland-Reinga (186,181sq km), Pegasus/East Coast (44,015sq km), and Great-South Canterbury (141,757sq km).

Exploration activities from permits awarded in Block Offer 2013 are continuing. Fifteen petroleum exploration permits were issued in Block Offer 2014, announced in December 2014. This is the largest number of permits issued from the three Block Offers that have been offered so far (since 2012) – and exploration activity is currently set to pick up, rather than decrease, Stevenson-Wallace said.

Block Offer 2015 closes on 30 September. Permits will be announced in December.

Triumphant Taranaki

According to NZP&M, Taranaki remains under-explored, however there remains considerable potential for further discoveries.

At 330,000sq km, the offshore Taranaki basin is New Zealand’s only producing offshore basin. Some of its most active fields include the giant Maui gas and condensate field, Maari, and Tui.

Wood Mackenzie analysts Angus Rodger and Matt Howell wrote in OE’s March 2015 issue that New Zealand had its most active year of exploration and appraisal drilling since 2010, with two rigs in-country.

“Exploration offshore New Zealand has also been poor, with only two small discoveries made. Recent drilling by Shell could change this picture, but the results have not yet been released,” Rodger and Howell said.

Maui

The Maui field sits about 35km off the Taranaki coast in 110m water depth. The field covers approximately 157sq km and contains PML 381012, PEP 381203. Its original gas reserves are estimated at 3.4 Tcf.

Shell’s 50% owned Shell Todd Oil Services (STOS) was granted a 35-year marine consent from New Zealand’s Environmental Protection Authority (EPA) for operations at Maui in June, the same month that STOS’s original date to operate was set to expire.

STOS plans to drill up to 12 sidetrack wells from the Maui A platform, and up to 10 sidetrack wells from the Maui B platform. Drilling would be done from existing conductors on the platform. A 24in carbon steel gas pipeline and a 10in condensate pipeline connects Maui A to the shore-based Maui production station at Oaonui.

Maui A began production in 1979 from 14 wells. The unmanned Maui B is operated from Maui A, situated about 15km away. It was installed in 1992 to allow full drainage of hydrocarbons from the field and to tap deeper oil deposits.

Discovered in 1969, Maui was one of the six largest gas fields in the western world.

STOS is the operator of Maui. Shell, through STOS, holds 83.75% interest with partners OMV (10%), and Todd Petroleum (6.25%).

Maari

The 34sq km Maari field is located about 80km off South Taranaki in PMP 38160, which also contains satellite fields Manaia and Matarkik tied back to a wellhead platform and Raroa floating production and storage offloading (FPSO) vessel. The field has a total of seven production wells and three water injector wells.

In May, OMV’s Maari MR7A development well began production with initial rates at 1500-2000 b/d, bringing Maari’s total daily production to about 15,000 b/d.

The Ensco 107 jackup is currently drilling the MR10 well to support continued production from the Moki formation.

OMV’s Maari growth project is being conducted to increase reserves, production, and recovery from the Maari field. It is considered to be the largest crude oil field in New Zealand with total reserves of 51 MMbbl. Production at the Maari and Manaia fields began in February 2009 from three producing reservoirs.

OMV New Zealand is the operator of PMP 38160 with 69% interest. Joint venture parnters include Todd Maari (16%), Horizon Oil (10%), and Cue Taranaki (5%).

Tui

The Tui area oil fields are located in the AWE-operated PMP 38158, northwest of Maui, approximately 50km off the Taranaki coast. It consists of three gas fields: Tui, Amokura, and Pateke, which have produced about 36 MMbbl from four horizontal wells and subsea completed wells, flowing to the permanently moored Umuroa FPSO.

In April, the subsea tieback and installation project to connect the Pateke-4H well to the Tui area oil fields gathering system was successfully completed and oil production commenced. At the time, Pateke-4H’s flow tests were underway to determine the optimal well settings. The well recorded an initial unstabilized flow rate of 34,000 b/d at 67% choke with 48% water cut, which is in line with field modeling.

Tui originally began production in 2007.

AWE holds 57.5% interest in PMP 38158 with partners New Zealand Oil & Gas (27.5%) and Pan Pacific Petroleum (15%).

Staying afloat

Both NZP&M and Wood Mackenzie seem to agree that New Zealand is not expected to be a victim of the low oil prices affecting the oil and gas industry.

In New Zealand, short-term activity is unlikely to be affected by the drop in oil price, Wood Mackenzie’s Rodger and Howell said.

According to NZP&M’s Stevenson-Wallace, New Zealand at its national level, does not expect the decline in oil prices to have a significant impact on decisions around existing petroleum exploration and production.

“Many companies are using the low oil price environment to rationalize portfolios, reduce operating costs and to take advantage of the reduction in drill rig and seismic vessel rates,” Stevenson-Wallace said.

Source: www.oedigital.com

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