Operator Australian Worldwide Exploration this morning said oil started flowing last night into the Umuroa FPSO about 50km off the Taranaki coast.

Managing director Bruce Phillips told PetroleumNews.net that the capex increase – the second such rise – had not compromised overall project economics.

“The partners still expect EBITDA to top $US269 million within three months of full production,” he said.

The fact that Tui oil had still started just 19 months after the project’s final investment decision vindicated the joint venture’s successful ‘fast track’ approach to the project, according to Phillips.

“This is AWE’s first oil production from New Zealand, the first offshore production from a project operated by AWE and is also the first sub-sea development in New Zealand,” he said.

“The start of production from the Tui Area development is a major milestone for AWE and, given some of the worst weather condition seen in 25 years during the construction phase, a substantial achievement by the joint venture and our project contractors.”

Phillips said production from the Tui, Amokura and Pateke oil pools was expected to increase over the next few weeks to reach a peak rate of 50,000 barrels of oil per day.

About 10 million barrels, of the field’s estimated pre-drill 27.9MMbbl of recoverable oil, was expected to flow during the first year of production. But Phillips said this figure would be updated, based on the post-drill remapping of the fields and early well production performance.

When fully commissioned, the Tui Area development will be New Zealand’s largest oil producing operation.

The Tui partners are operator AWE (42.5%), Mitsui E&P NZ (35%), New Zealand Oil & Gas (12.5%) and Pan Pacific Petroleum (10%).

More NZ exploration ahead

“AWE is now seeking more commercial successes in New Zealand through one of the country’s largest ever offshore exploration drilling programs,” Phillips said.

“This campaign currently involves drilling the Hector, Taranui, West Cape and Kopuwai prospects which collectively target potential recoverable reserves of hundreds of millions of barrels of oil.”

Hector-1 was spudded last Friday, July 27, and at 6am today, New Zealand time, the Ocean Patriot drilling rig was cementing casing at a measured depth of 1506m drilling towards a planned total depth of 3870m.

The Hector prospect is located in PEP 38483, about 65km southwest of the Tui Area Development. Hector-1 is being drilled in a water depth of 170m.

AWE says Hector alonecould contain more than 100MMbbl of recoverable oil.

Following Hector-1, AWE and its partners plan to drill the Taranui-1, West Cape-1 and Kopuwai-1 wells in a continuous campaign.