Tamarind mess not reflective of industry: oil and gas body

NEW Zealand’s peak body for the oil and gas industry says it has been left “frustrated and disappointed” by Tamarind Taranaki’s demise, and moved to reassure the public the liquidation of the company and issues associated were an “isolated case.”
Tamarind mess not reflective of industry: oil and gas body Tamarind mess not reflective of industry: oil and gas body Tamarind mess not reflective of industry: oil and gas body Tamarind mess not reflective of industry: oil and gas body Tamarind mess not reflective of industry: oil and gas body

Paul Hunt

Senior Journalist: Energy & Commodities

Paul Hunt

Tamarind Resources is a Malaysian company, which through a variety of subsidiaries owns productive oil and gas fields in New Zealand, the Philippines, and Australia. 

Last year the company's subsidiary Tamarind Taranaki went into voluntary administration, citing "a number of commercial factors."

Tamarind Taranaki owned the offshore Tui oil field which was successfully producing at a commercial rate until the subsidiary went into liquidation in December, with BorrelliWalsh appointed. 

The subsidiary, which had limited liability, owed hundreds of millions of dollars to contractors and creditors, including FPSO provider BW Offshore. 

It also faced the prospect of safely plugging and abandoning multiple wells across the Tui oil field and removing subsea infrastructure including piping and wellheads. 

However, having gone into liquidation, and once pronounced dead and buried, the liabilities associated with field decommissioning will be passed to the Crown in New Zealand, at least according to the country's Environmental Protection Authority. 

Today the oil and gas peak body, the Petroleum Exploration Production Association of New Zealand, told Energy News the Tamarind situation was "very unusual" and not business as normal for the industry. 

"Companies are responsible for decommissioning costs, and by and large this is what happens. The situation with Tamarind is very unusual, frustrating and disappointing," PEPANZ chief executive John Carnegie said.

PEPANZ noted  Tamarind Resources, the parent company of Tamarind Taranaki, had a guarantee with the New Zealand government, and while the EPA believes the full costs or majority of costs of decommissioning will be passed to taxpayers, that Tamarind Resources may still  come good. 

"It would be disappointing if the government is liable for the full costs, however it's worth noting they would have given a 42% rebate towards these costs in any event as part of New Zealand's tax rules," Carnegie said. 

Since it came into production in 2007, the Tui oil field has provided the New Zealand government more than NZ$600 million in royalties. 

Currently, the costs of decommissioning the field are yet to be worked out. 

Despite the prospect of the Kuala Lumpur-headquartered Tamarind Resources escaping without paying any of the decommissioning costs, never mind its subsidiary's creditors, the company is continuing to operate other oil and gas fields in New Zealand and Australia. 

Last month the company, through another subsidiary, began production from the Supplejack field in onshore Taranaki. Production from the field will be 4000 mcf/pd, and gas produced will be exported via pipeline to the domestic market.  

Tamarind Resources also began a comprehensive multi-well workover program at its onshore Cheal field, which is owned through yet another subsidiary. 

Yesterday activist group Greenpeace slammed the mother company for "shirking its responsibilities" and called on Tamarind Resources to pay the cost of decommissioning its Tui oil field if it had the money to pursue other onshore opportunities. 

PEPANZ boss John Carnegie pointed out that under the law the subsidiaries were different companies and this ringfenced them from each other. 

In December, Jason Peacock who was serving as Tamarind Resources' country manager in New Zealand was replaced by Neville Beston. 

According to the company's website, in Australia, again through subsidiaries, Tamarind Resources hold an interest in the Kato joint venture, a partnership alongside Skye Energy and Hydra Energy.

The jv are looking to develop the Corowa, Amulet, and Taunton fields in the Carnarvon Basin offshore WA.

The company also held an interest in Perth Basin player Triangle Energy, however Energy News understands the company gave up that interest some months ago.