Drilling  programme  is vital in  ensuring  NZ does  not   become  dependent  on  imported   oil and gas

The  arrival  of  the   self-propelled, 34,500-tonne  offshore  drilling  rig COSL Prospector in  Taranaki   heralds   an  important  stage  in  the exploitation of  NZ’s oil and  gas  resources.

The first task  for  the  rig is to  drill three side-track wells  for Malaysian-based Tamarind  at  the  Tui offshore field, in the  expectation it  can  extend  the life of the field  beyond    next year and  lead  to the extraction of  6-8m  barrels of  oil.

Then the  rig   is  contracted  by  OMV, operator of the offshore  Pohokura  and Maui   fields, to  drill an exploratory well in the Great  South Basin.

OMV, which also operates the offshore Maui and Pohokura gas fields, expects to begin drilling towards the end of the year – potentially using the COSL Prospector if  consents  are secured.  OMV’s first well lies in about 1,200 metres of water 130 kilometres south-east of Balclutha.  If successful, the programme potentially could involve drilling 10 wells, up to two further exploration wells and up to seven for appraisal.

The potential of the deep sedimentary rock in the Great South Basin, and the Canterbury Basin to the north, has long been recognised.  There are proven petroleum systems in the region but drilling has been sporadic since the 1970s.  Activity dried up after the plunge in oil prices late 2014.

OMV and partner Mitsui have been exploring in the GSB for 12 years but are yet to drill a well.  Their 16,700 square-kilometre permit, extended by the government last year, expires in July 2022 and requires the drilling of a well by July 2021. If drilling is successful the permit can be extended out to 2030.

The   drilling  programme  is a  vital  element in  ensuring  NZ’s  economy  does  not   become  almost totally   dependent  on  imported   oil and gas supplies.  It  also   offers   an  opportunity to  boost    GDP  at a  time when economists   are  warning  continuing  low productivity  will erode living standards  (and should  we  mention it, “well-being”?).

But  not all  New Zealanders  are  happy  about the  arrival  of  the   drilling  rig  offshore.  Greenpeace climate campaigner Amanda Larsson says the arrival of the OMV-contracted drill rig contradicts Jacinda Ardern’s declaration that climate change is her generation’s nuclear free moment.

“This OMV rig is a 34,000 tonne embarrassment.  It’s come from Norway – literally the other side of the world – to search for new oil and gas during a climate emergency.  I imagine the phrase on many people’s lips right now is probably WTF,” she says.

Tamarind’s Lauren Wallace, talking of   the Tui Field, reports  it  has produced more than 40.7m barrels of crude  since production began in 2007.  If no further activity is undertaken in the field, it is likely that by the end of 2019, production rates from the field will be uneconomic and the assets will need to be decommissioned.  The objective of the side-track wells, Wallace says, is to access a future 7.5m barrels of oil reserves from Tui.

Tamarind considers that a successful outcome of the proposed activities would extend the life of the Tui Field to 2025.

At the end of 2016, the government has received $573m in royalties from Tui Field and an additional $10.3m is forecast up to 2020.

The planned work programme will not result in any new wells being drilled into the seabed or any new structures being placed on the seafloor.

A side-track development re-enters a well from a surface location with equipment designed to deviate from the existing well bore and find oil in an alternate zone.  Crude oil from the fields is pumped to a floating storage and production vessel, the Umuroa, anchored off the Taranaki coast.

Depending on the results of the first three sidetrack wells drilled, a decision may be made to drill a fourth sidetrack well.

The COSL Prospector’s arrival off the Taranaki coast is the end of a four-month journey since it left Norway in February, with stopovers in Portugal and South Africa where NZ crew members joined the vessel.

Earlier, a OMV-contracted jack-up rig completed maintenance work at the Pohokura production platform off the North Taranaki coast.

Meanwhile  as  climate  change  campaigners  call for  a  cessation  of oil drilling,  NZ  remains  far  from  self-sufficient in   fossil  fuel  production.  But   oil  giants   like  ExxonMobil  are  planning to  expand  production,  with the objective of  lifting   its own  output   by  25% from 2017 levels  by  2025, saying  it is  providing   the energy needed  by economies  and   by people’s standards of living.   It is  about to  exploit  a  new field offshore in  Guyana   which could become the  second biggest  oil producer   in Latin  America,  after   Brazil, transforming  a poor and tiny  country  into a petrol  state.

One thought on “Drilling  programme  is vital in  ensuring  NZ does  not   become  dependent  on  imported   oil and gas

  1. Dear Ian This is encouraging…both for Taranaki….and then for the South.. I am wondering whether toto chase my National chaps to endorse. But is Jonathan Young up to it? Perhaps I should just make the point to Simon Bridges—-get back to the old mantra of jobs and growth…and NZ gas and oil to save foreign exchange? Hugh H


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