Game over for Tamarind Taranaki

MALAYSIAN-headquartered Tamarind Resources’ New Zealand arm has now officially gone into liquidation following a creditors’ meeting this week, according to the New Zealand Companies Register, the country’s version of ASIC.
Game over for Tamarind Taranaki Game over for Tamarind Taranaki Game over for Tamarind Taranaki Game over for Tamarind Taranaki Game over for Tamarind Taranaki

Paul Hunt

Senior Journalist: Oil & Gas, Policy.

Paul Hunt

 

The company went into voluntary administration in early November, blaming a "deterioration in oil prices" and a "number of commercial factors."

It owes its key contractor BW Offshore more than $33 million in hire costs for the Umuroa FPSO on the Tui oilfield.  

Weeks after entering administration Tamarind was issued a stop order, closing all operations on the Tui field, by the NZ Environmental Protection Agency after a flowline connecting the Tui 2H well to its FPSO split causing an oil spill.

Yesterday, following a meeting with creditors the company was officially placed into liquidation. BorrelliWalsh were appointed liquidators.

However, creditors are expected to face large losses due to the value of Tamarind Taranaki's assets.

In a statement to the New Zealand Herald, administrators said the value of the assets is "nowhere near" the amount creditors are owed.

In total the company owes more than A$300 million to creditors, according to the New Zealand Herald. This includes an estimated $145 million to the New Zealand government in decommissioning costs.

The government is currently assessing how to fund decommissioning of the field. According to reports, the parent company Tamarind Resources has guaranteed covering around 50% of the costs of decommissioning.

However, sources told Energy News that if Tamarind's parent company failed to cough up the cash it would be inevitable that the Crown would have to front the costs of decom work as there are no state rehabilitation funds for the oil and gas sector.

It is currently unknown whether the NZ government will be able to enforce the guarantee as it is largely an unprecedented event in New Zealand and Tamarind Taranaki is a limited liability company meaning shareholders, owners and board member cannot be held accountable during the liquidation process.

In other parts of the world, such as the North Sea, if a company goes under and decommissioning work cannot be funded, the costs are passed on to previous titleholders.

Energy News understands from a practicality sense in the Tamarind case the government will pay the full costs of decommissioning.

Australia also currently has no abandoning well fund or scheme to cover rehabilitation should a company become insolvent.

This has become an issue for the federal government in recent months following the administration of Northern Oil and Gas Australia which owns the Laminaria and Corallina fields offshore Western Australia.

The cost of plugging and abandoning the two fields as well as decommissioning the Northern Endeavour FPSO could reach A$200 million.

Energy News reached out to Tamarind Resources, its subsidiaries and liquidators and administrators for comment but was not able to obtain comment by deadline. 

 

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