New Zealand hopes for more finds
The government of New Zealand has awarded 21 of 26 new exploration permits, three of them offshore in the Taranaki basin.
Paul Swain, associate minister of energy, is optimistic about the results of this bidding round.
"The latest round of new permits will mean a more intensive exploration effort in Taranaki over the next few years. With more companies exploring over generally smaller permit areas than issued in the past, it is hoped that this will lead to more oil and gas being found," he said.
PEP 38481 and PEP 38482, two of the largest offshore permits, were awarded to the Shell-OMV and Todd partnership, a group that also holds the Maari offshore prospect.
Wellington-based Indo-Pacific Energy Ltd. won the other offshore block, PEP 38480, its first New Zealand offshore permit. PEP 38480 is northeast of the Pohokura gas-condensate field.
Swain has already approved holding a future permit bidding round in the Taranaki Basin. The next round will include blocks that have become available since the latest round. A large part of the next bidding round is expected to be offshore north Taranaki.
Permit boundary maps and work program summaries for each of the new permits are available on the petroleum section of the Crown Minerals website at www.crownminerals.govt.nz.
The search for gas
Part of the newly generated interest in New Zealand's offshore is a result of the need for gas. Geology indicates that the Pohokura field holds reserves of 1 tcf of gas and 53 MMbbl of condensate. This puts Pohokura in second place for reserves behind Maui to the southwest, which holds 3.8 tcf of gas and 199.5 MMbbl of condensate. Pohokura is the only gas field since Maui to be declared commercially viable as a single-field development.
Diamond Offshore's Ocean Bounty.
Shell owns 66.7% of Pohokura, with partners Preussag holding 33.3% and Todd Energy the remaining 18.7%.
Shell New Zealand, a unit of Royal/Dutch Shell Group, majority owns the Maui field off New Zealand's west coast. Maui supplies over two-thirds of the country's natural gas.
In late August, New Zealand's Natural Gas Corp. finalized an agreement with Shell New Zealand Ltd. for the return of an entitlement to Maui gas to NGC. The contract also covered acquisition of gas supply contracts.
The Maui field is currently under redetermination to more precisely assess the field's reserves. The decision to re-evaluate the field followed the revelation that the field's reserves could be depleted two years ahead of the original estimate. That means that the field will not be able to supply gas after 2007.
While the re-evaluation is underway, an inspection and maintenance program is being finalized. The field is to undergo inspection and maintenance in November. The planned work necessitates that the facilities be partially shut down in a phased program that will take the entire month.
This program is not expected to have a significant impact on gas delivery, which should be sustained at 75-90% throughout November. Current estimates are for the tightest constraints to be felt toward the middle of the month, when the Maui B platform is to be isolated while an emergency shutdown valve in the pipeline is replaced.
Drill bit taps Pohokura
Drilling activity is strong off New Zealand. Diamond Offshore's semisubmersible Ocean Bounty has been contracted to drill at least two wells off Northland and Taranaki. Pohokura operator Shell Todd Oil Services confirmed that the rig was expected in Taranaki by late Sept-ember to drill the Pohokura North appraisal well in license PEP 38459. The objective in drilling the Pohokura North well is to establish the northern extent of the gas-condensate field and to further evaluate this region of the field.
An appraisal sidetrack well into the southern end of the Pohokura gas-condensate field offshore Taranaki was to be drilled from an onshore site north of New Plymouth. Parker Drilling's Rig 188, which previously drilled the Huinga-1B sidetrack well, was contracted to drill the Pohokura well in PEP 38459. The well was to be drilled from the onshore Pohokura South well site (drilled in early 2001) and deviated offshore. The aim of the sidetrack well is to ascertain the southern extent of the field. The well could also be tested to determine the maximum sustainable production rate for a typical deviated development well.
New Taranaki petroleum exploration permits.
When STOS's Pohokura program is complete, ConocoPhillips plans to use the Ocean Bounty to drill its second well in the offshore Northland permit PEP 38602. The well is to spud in November in an area south of the permit. The drilling program is expected to take 30 days.
Conoco operates PEP 38602 with 56.67% interest. Partners are Inpex Corp. of Japan with 33.33% interest and Todd Petroleum Mining with 10%.
STOS has announced plans to drill the Pohokura South-01 well from an onshore site near the Methanex Mot-unui complex to test the southern limit of the field.