Energetic Taranaki to face labour, infrastructure challenges

TARANAKI is tipped to face labour market and infrastructure constraints through to 2009 and beyond, with its quartet of approved or planned major offshore energy projects: the Pohokura and Kupe gas-condensate, and Tui Area and Maari oil field developments.

Energetic Taranaki to face labour, infrastructure challenges

But energy industry representatives say the local population should pull the various sectors together and work with overseas compatriots to overcome any obstacles.

Not since the early to mid-1980s, the days of Taranaki’s “Think Big” projects – the synthetic petrol, methanol and ammonia urea plants – has there been so much activity in the local energy sector.

Good office space is at a premium in New Plymouth; booking suitable air flights to and from Auckland or Wellington is becoming difficult; and the region’s accommodation facilities are well utilised, particularly in New Plymouth.

These issues will only intensify as offshore drilling and production activities increase.

Sandy Macklin, managing director of OMS Group, which has the offshore manning contracts for the $NZ1 billion ($A856.5 million) Pohokura project, says the situation in Taranaki reflects the state of affairs worldwide.

“I recently made a trip to the United Kingdom and visited a number of drilling contractors in Asia, the Middle East and Europe en route. All identified the same issues,” he told

“All our operations worldwide have the same problem – labour shortages and an ageing workforce.”

He said tight markets, whether pertaining to drilling rigs, seismic vessels, ancillary equipment or personnel, looked set to continue in a global environment of near-record oil prices and robust exploration and production activity.

OMS, which set up office in New Plymouth last August, earlier this year advertised for offshore rig and marine manning personnel, as well as offshore construction and catering crews, for the Pohokura project.

Macklin said the response from New Zealand residents in the country was encouraging. However, most were from people with insufficient experience.

“We advertised New Zealand-wide and the responses measured in terms of quantity were good. But the majority of applications were from candidates with no previous offshore, or even no onshore, experience.”

He also said another difficulty was luring the many expatriate New Zealanders involved in overseas energy projects.

“We are aware that there are a significant number of experienced New Zealand personnel in the offshore industry. Indeed, we have a number of Kiwis working within our Australian and international operations.

“However, it has so far proved difficult to attract such personnel back into the local employment arena.”

Macklin said the only sensible way forward was to develop and utilise local labour.

He applauded the establishment last year of the Taranaki Drilling School and said OMS financially supported the New Plymouth-based centre run by Greymouth Petroleum.

“The key here is to train and develop new recruits to the industry and give them the necessary experience without compromising safety. This school is potentially an excellent training course and we have already provided employment to a number of drilling school graduates.”

OMS is also responsible for the provisioning of crew members later this year for the Diamond offshore drilling rig Ocean Patriot. That semi-submersible is scheduled to be in New Zealand waters about mid-2006 to drill a number of exploration and development wells in a number of basins, including several offshore Taranaki for the Tui Area partners.

“OMS is conscious that our local New Zealand manning requirements will continue through 2009 and beyond, and we are committed to ensuring that the local labour market is the main beneficiary of the current offshore boom.”

“Our staff numbers continue to increase both in the office and offshore – we would fully expect to exceed our earlier estimates of 200 employees.

“I don’t think that New Plymouth even yet fully understands the impact this large increase in offshore activity will have on the local community.

“Despite the various challenges facing the local industry, we look forward and are committed to being part of the solution,” Macklin added.

Brian Souness, who heads the New Plymouth-based Engineering Taranaki consortium, told that the anticipated ripple of redundancies, and infrastructure downsizing in Taranaki – because of the decline in Maui crude, condensate and gas production, together with the near-decimation of the Methanex methanol plants – had not occurred.

“We had an expectation that a ripple would flow through the Taranaki community as jobs, direct and indirect, were lost. This has not really happened and there has almost been no impact.”

Souness said large energy projects tended to pressure existing local resources, personnel and infrastructure.

“Whether we like it or not, the local industry cannot gear up to do everything and in many cases, international companies will have to be involved in engineering design, modular fabrication, ship refits, pipeline laying and drilling operations,” he said.

However, he said the impact of more, smaller operations would probably provide more opportunities, not fewer, for small service companies.

“Generally things look like they will stay about the same size, or maybe even grow a little.”

Souness said the greatest potential problem was a lack of good coordination between the various operators – Shell NZ (Pohokura), Australian Worldwide Exploration (Tui), OMV (Maari) and Origin Energy (Kupe).

“Greater communication between these parties over issues such as industrial relations, health and safety in employment (HSE), and contractor expectations – is needed to avoid major disruptions.”

Macklin concurred, saying “the industry needs to ensure that all parties involved – the oil companies, drilling and marine vessel owners, manning contractors, unions and government – work collaboratively towards developing a sustainable solution to these issues”.

OMS has more than 100 personnel assigned to the Pohokura project on the Ensco 56 and on the Dive Support Vessel (DSV) Rockwater 2. The crew on the Ensco 56 are all New Zealand nationals, as are the majority of the OMS crew on the Rockwater 2.

Later this year, OMS will also be providing the local manning requirements, anticipated to be 30-40 personnel, to the Ocean Patriot.

At later stages, there will be the additional marine vessel manning requirements associated with the operation of the Tui and Maari floating production, storage and offloading vessels.

First Pohokura gas ashore is scheduled for the third quarter of this year; first Tui oil is scheduled from mid-2007 and first Maari crude about a year later. A final investment decision on the $US540 million ($A766 million) Kupe project is scheduled for later this half-year with the aim of getting first gas ashore during the second half of 2008.


A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.

A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.


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