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NZ Petroleum Conference - state of play

By Neil Ritchie

The 2017 year saw a lot of mergers and acquisitions in the New Zealand oil and gas sector but the next year or two should see an upswing in activity, both offshore and onshore, for the maturing Kiwi oil and gas industry, Woodward Partners head of research John Kidd told the 2018 Petroleum Conference in Wellington last week.

There were a lot of mergers and acquisitions during 2017 (but) with the challenges of the past twelve months there were now some more investment, exploration opportunities opening up, Kidd said. “There could be something for everyone.”

 

He added that 2018 and beyond could prove to be “transformational” with the “reboot” of four of the five offshore fields -- the Maui and Kupe gas fields and the Maari-Manaia and Tui oil fields. (The Pohokura near-shore gas field is unlikely to see a reboot for many years.) 

 

The increased stakes Austrian-headquartered OMV had taken recently by buying out Royal Dutch Shell’s New Zealand assets (minus the multinational’s sale last year of its half stake in the onshore Kapuni gas field to Todd Energy) was “very positive” with OMV’s deep understanding of fields, particularly those in their latter years of production.

 

OMV’s “expertise” in decommissioning should help with the wind down of Maui – this country’s first commercial offshore gas find that is now in its 60th year of production.

 

As well, New Zealand companies Todd Energy and Greymouth Petroleum (plus some small overseas companies) meant a fairly active onshore Taranaki scene and that should also continue during 2018 and beyond.

 

Kidd talked about an overall upswing in investment and activity. So, he said, “prepare for the next hump in activity and prepare for the next investment hump.  . . the breadth of liquidity has never been higher”.

 

Elemental Group consultant Mac Beggs said the last 12 months had seen some entries into the country’s oil and gas scene, notably Tamarind Management buying into the Tui oil field and Aussie listed Horizon Oil buying an additional 16 percent stake in the Maari-Manaia oil field and joint venture assets from Todd Energy. Horizon's stake in the venture will now be 26 percent, with operator OMV holding 69 percent and Aussie junior Cue Energy with a 5 percent stake.

As well, Sapura Exploration and Production has signed a series of farm-in agreements for five permits in the offshore Taranaki Basin. These farm-in deals, which still need the approval of various New Zealand Government authorities, are with OMV and Mitsui.

Sapura is to gain a 30 percent interest in all five shallow water licences -- PEPs 57075, 51906, 60091, 60092 and 60093 – all of which OMV operates. Sapura will hold the 30 percent stake and OMV 70 percent in PEPs 57075 and 51906. For PEPs 60091, 60092 and 60093, Sapura will take a 30 percent stake, OMV 40 percent and Mitsui 30 percent.

 

But there have also been some departures, notably Houston-headquartered Anadarko Petroleum.

However, New Zealand Petroleum & Minerals (NZPAM) executive David Darby said that despite the significant changes in the Government, “New Zealand remains an outstanding place to do business . . . we are poised for growth.”

One small but still significant event in onshore Taranaki is Canadian listed junior TAG Oil recently reporting that the Pukatea-1 well, having been completed in the Mount Messenger formation,  where 12.9 metres of oil and-gas bearing sands were perforated, had flowed naturally at rates of up to 600 barrels per day of fluids on initial well clean-up.

And over a 12-hour test period, using a 24/64” choke setting, the well flowed at a stabilised rate of about 276 barrels of oil equivalent per day (74 percent being oil) without the need for any artificial lift. Pukatea-1 is located in licence PEP51153 (TAG Oil 70 percent) and the permit also contains the shut-in Puka-2 oil well.