South Pacific: New Zealand

SOUTH PACIFIC

New Zealand

This island nation produces over 40,000 bopd, principally from onshore Taranaki basin on the West Coast of North Island. Internal gas demand is satisfied by some 600 MMcfd production from six fields in Taranaki and the large Maui field, 17 mi off the coast in offshore Taranaki basin. Maui contributes 70% of the total gas output. Taranaki basin is the most active area; the East Coast basin in North Island and Canterbury basin in the east of South Island are also active exploration areas.

Between 1997 and 2000, all open acreage has been available through the Acceptable Frontier Offer (AFO) scheme. The government recently introduced a formal bidding round for onshore Taranaki and awarded all six permits on offer. A revised schedule for onshore Taranaki and onshore / offshore Canterbury was to be announced in 2001. Virtually all other areas are available for exploration under AFOs.

Between April 2000 and April 2001, four new license awards were announced. Thomasson International Ventures was awarded PEP 38511, offshore West Coast basin, off the northwest tip of South Island, where earlier seismic indicated deep sediments. In offshore Taranaki, a Texas consortium led by Discovery Geo acquired PEP 38471, between the operator’s existing onshore / offshore permits. Stewart Petroleum, a subsidiary of New Zealand Oil and Gas (NZOG) got PEP 38472, between Maui and Kupe South / Toru gas discoveries. And PEP 38474, lying NW of New Plymouth was awarded to Energy Exploration, a permit holding subsidiary of Fletcher Challenge Energy.

During the same period, two operators relinquished their licenses. Santos / Bligh / Swift Energy gave up PEP 38712, onshore Taranaki, after a dry hole at Oakura. Indo-Pacific Energy relinquished PEP 38339, on / offshore East Coast basin, after seismic studies. And Amity Oil gave back PEPs 38727/735, onshore Taranaki. Numerous license changes saw operators juggle working interests and operatorships / farm-ins. Some of the more aggressive companies included: Millennium Exploration, Amity, Orion, AMG, Texas Petroleum, Fletcher, Durum Consolidated Energy, Pancontinental Oil and Gas, Origin Energy and GEL Exploration. In October 2000, Fletcher Challenge Energy announced that it would be purchased by Shell New Zealand (a unit of Royal Dutch Shell) and Apache Corp. In March 2001, Fletcher shareholders voted for the bid. Shell will acquire Fletcher’s E&P assets in New Zealand and Brunei; Apache will gain FCE’s assets in Argentina and Canada. Late last year, Shell was reporting major exploration / development plans in New Zealand.

Wood Mackenzie’s list of significant completions for the last three quarters of 2000 and first-quarter 2001 describes 18 exploration and appraisal wells by eight different operators. Westech Energy had a discovery and three dry holes on three onshore permit areas, with five wells. It drilled Windsor 1 and appraisals 2 and 3A on PEP 3872 in Taranaki; the first and third were oil / gas and gas, respectively; Well 2 was dry. The discovery, 1 km north and east of Ngatoro and Kaimiro oil and gas fields, respectively, was completed as an oil / gas producer; additional seismic is being analyzed. The operator tested PEP 3873, just east of Ngatoro field, with wildcat Maketawa 1, which came up dry. Westech then moved to the East Coast basin to drill the Waitaria 2 dry appraisal on PEP 38335.

Fletcher Challenge drilled the Pohokura 1 wildcat and No. 2 appraisal on PEP 38459, offshore Taranaki, 3 and 6 mi, respectively, from Methanex’s methanol plant at Motonui. The two wells proved up 750 Bcf gas and 40 MMbbl condensate. The close market likely ensures rapid development. First deliveries are estimated for 2004. A third appraisal, Pohokura South 1, was drilling in mid-2001. The operator also completed Tuihu 1 on PEP 38718, NE of Tariki field, with gas shows, but low porosity. Indo-Pacific Energy drilled three dry holes. The Speedy 1 ST1 in PEP 38332, East Coast basin ran into difficult drilling; the Arcadia 1 in PEP 38256, Canterbury basin in the east coast of South Island, did find reservoir quality sands but little hydrocarbon; and in PEP 38723, just west of Tariki field in Taranaki, Indo’s Ratapiko 1 wildcat came up dry.

Swift Energy drilled three appraisals in late 2000 and early 2001 on its PEP 38719 license, the Rimu prospect on the coast in Taranaki basin, 12 mi SE of Kapuni field. The field was discovered in 1999 with a 1,500-bopd test. Rimu B1, B2 and A2 appraisals have delineated the structure and two more appraisals are planned in 2001, Well A3 DW was drilling in April. A 3,500-bopd production facility is to be ready by year-end, it can also handle 10 MMcfd gas. GEL and Millennium Exploration had dry holes in PEP 38721, Taranaki, with Crusader 1 and 1A wildcats. AMG Oil had a duster in Ealing 1, in PEP 38256, Canterbury basin. And operator Indo-Pacific Energy’s Goldie 1 in PMP 38148 in Taranaki, just west of Ngatoro field found oil and produced 1,000 bopd through long-term testing. FCE and NZOG hold most of this mining license, which Indo drilled on a sole-risk basis.

Since June 1, the Goldie 1 onshore New Zealand has produced more than 50,000 bbl of oil, at a rate of 650 bpd. Indo-Pacific Energy drilled the well in early 2001, on permit PMP 38148, near Ngatoro oil field in the Taranaki basin. (Photo courtesy of Indo-Pacific Energy)

NZOG is enhancing recoveries from Ngatoro field with more drilling, and it expected to emphasize drilling in Tui and Opito prospects. The Crown Minerals Department started an extensive speculative seismic survey in April 2001 over the deepwater Taranaki basin; using contractor TGS-NOPEC – a bidding round is expected in 2002. A press report said 10 permits – including onshore and shallow water tracts in Taranaki, and encompassing the Mangahewa gas field to come onstream in July 2001 – would be launched in June. And it was reported that Shell New Zealand plans to begin active development of Pohokura gas field and Maari oil field in 2001. Offshore Pohokura could involve one or two subsea completions or small platforms in the north and south, with a pipeline to onshore processing. Maari, some 18 mi south of Maui offshore gas field, could have two appraisals in 2001.