South Pacific: New Zealand

SOUTH PACIFIC

New Zealand

This island country produces an estimated 41,000 bopd and over 500 MMcfgd, principally from onshore Taranaki basin, with its large Maui field, on the West Coast of North Island. An analysis in Petroleum Review in May 2000 notes that the Taranaki basin is the most explored region, containing 250 of the country’s 500 wells. The East Coast basin in North Island and Canterbury basin in the SE of South Island are also attracting interest. After the government switched to Acceptable Frontier Offer (AFO) permits, which virtually open all other areas except the special bidding area noted below, the number of companies exploring increased greatly. By year-end 1999, 50 permits had been issued covering six regions – a high wildcat success rate has helped.

Three companies, Shell, Todd Energy and Fletcher Challenge Energy, dominated the upstream scene until initiation of AFO permits; now more players are active. In third-quarter 1999, for a formal bidding round for Taranaki acreage – in place of the AFO scheme – nine bids were received and five were awarded: Westech Energy acquired three PEP permits: 38732, 38733 and 38734; Fletcher added PEP 38730; Amity got 38735, south of Kaimiro oil / gas field; Indo- Pacific / Millennium Oil and Gas picked up 38736, south of McKee oil field; and EEX added 38468, offshore Taranaki, to supplement its recent acquisition of 100% interest in 38213. Later, Westech acquired PEP 38731, north of Taranaki, as the sixth and final award from the bidding round.

In first-quarter 2000, Anshutz Corp. acquired 38257 offshore Canterbury basin, stretching some 200 km off the east coast of South Island. And Bligh Oil and Minerals got onshore Taranaki basin 38738 next to Ngaere / Waihapa oil fields. Some companies increasing their interests by purchases / farm-ins include: EEX (PEP 38213), East Coast basin; AWE (38460), offshore Taranaki; Indo-Pacific’s restructure of assets with Trans-Orient for seven PEP areas; and Shell / Todd (38459) offshore Taranaki. And Millennium Exploration increased its shares of 38331/38721, onshore North Island, to 100%, plus 70% of 38510 in onshore Murchison basin, South Island.

For exploration drilling, about 15 wells were drilled last year, contributing five commercial oil / gas discoveries. Some of the more significant efforts after mid-1999 include: Bligh Oil & Minerals’ Huinga 1 dry hole appraisal on 38329, North Island; Conoco’s Waka Nui 1 dry-hole wildcat, offshore NW North Island; Swift Energy’s Rimu-A1 on 38719, an oil / gas discovery onshore Taranaki, 16 mi SE of Kapuni field – additional seismic is planned, the area has two other prospects, Kauri and Tawa, which could be drilled this year. And NZOG’s Hochstetter 1 wildcat on 38460 offshore, using theOcean Epoch semi, produced oil shows.

Swift Energy’s Rimu A1 well in New Zealand’s Taranaki basin was drilled during second-half 1999, and it tested 1,525 bopd and 4.8 MMcfgd. (Photo courtesy of Swift Energy Co.)

Indo-Pacific drilled a duster with Clematis 1 wildcat in 38720, onshore Taranaki, and another dry hole in Whakatu 1, onshore 38328. Westech had gas shows in the Tuhara 1 re-entry on onshore 38328. In April, Fletcher found gas / condensate in Pohokura 1 and 2 (appraisal), using the Ensco 50 jackup, 3 mi offshore from Methanex’s methanol plant at Motonui, a principal gas consumer; development is likely, following No. 2 appraisal testing and possibly more drilling. Fletcher says the prospect could hold 750 Bcf of gas and 40 MMbbl of condensate.

With a viable infrastructure for both oil and gas, and typical per-well productivity higher than the worldwide average, fairly rapid development is normal. Reserves to be developed over the next six years are split 40% gas and 60% oil. Listed as discoveries still being appraised, but likely to be developed are: Maari, Pohokura, Rimu, Kauhauroa, Awatere and Tuhara. Kauhauroa gas field was the first commercial discovery outside Taranaki basin; it has increased interest in the East Coast basin – a 75-mi pipeline south to Hastings could be required.

Country-wide reserves were conservatively noted by Crown Minerals in early 2000 at 96 MMbbl of oil / condensate and 2.1 Tcf of gas, without addition of several new discoveries. Ten to 15 exploratory wells will likely be added this year, with about half offshore.