The FIDs for the proposed US$400 million Maari oil field development should be made within three weeks. Maari minority partner Horizon Oil told the ASX yesterday that it expected all the Maari partners to have made their decisions by mid-November.
Negotiations with the preferred contractors had already started, with a view to having design and construction completed by late 2006 so production from the offshore Taranaki field could start shortly afterwards.
Horizon has already made its positive FID and has development finance of up to US$40 million approved with Bank of Scotland subsidiary BOS International.
The company said it also expected Crown Minerals to soon grant a 25-year Petroleum Mining Permit for Maari.
The primary reservoir and the initial focus of the development plan is the Miocene-aged Moki formation, which flowed over 3650 barrels of oil per day in the Maari-1 test. Estimated P2 reserves in the Moki formation are about 50 million barrels of recoverable oil.
The PEP 38413 partners are: operator OMV NZ (69%), Horizon Oil (10%), Todd Petroleum Mining (16%) and Cue Energy (via Highlands Oil & Gas) (5%).
Meanwhile FIDs for the US$200 million offshore Taranaki Tui Area oil fields development are also expected before the end of November, according to New Zealand Oil & Gas.
It told the NZX yesterday afternoon that the Tui Area (Tui, Amokura and Pateke fields) project was proceeding well, with contracts in a final form or advanced stage of negotiation.
NZOG has previously reported contracting the semi-submersible Ocean Patriot rig to drill the four Tui Area development wells, and possibly several others in PEP 38460. Yesterday its said other contracts, including the leasing of a FPSO were either nearly in final form or would be negotiated by the operator in short order.
“It is expected that all of the ingredients needed for the joint venture parties to ‘push the button’ for Tui will come together within two to three weeks,” the Wellington-headquartered company said.
The investment budget for the Tui development was now US$200 million. While this was “substantially” above last year’s initial estimates, the expected initial rates of oil production had also increased, with initial production of up to 50,000 barrels of oil per day (bopd).
“There are increasingly strong views that the oil price will stay around the higher prices of recent times for quite a lot longer than was predicted some months ago. A price of US$50 per barrel when Tui starts up in early 2007 is now seen as quite possible," NZOG said.
“Even at US$40 per barrel, NZOG’s investment in the Tui development would be recouped in the first four months of production.”
There were also several as-yet-undrilled oil prospects in the vicinity, each of which could contain 10-20 million barrels of oil, and any discoveries here would be tied into the Tui development. The Tui Area has P2 reserves of 20-30 million barrels.
“While drilling costs have escalated dramatically, up approximately 300% over the past year, the value of the prize makes such increases affordable,” the company said.
Recent seismic interpretation of the Pateke 3D survey (Tui extension) had confirmed the closure over the northern part of the Pateke oil pool, resulting in a small reserves increase for this part of the Tui Area.
The PEP 38460 (Tui Area) partners are: operator Transworld (via New Zealand Overseas Petroleum (45%), NZOG (via Stewart Petroleum) (12.5%), AWE New Zealand (20%), Mitsui E&P New Zealand Limited 12.5%, Pan Pacific Petroleum (via WM Petroleum) (10%).
