OMV upbeat on wells' future life

JAMES WEIR

The boomer off-shore Taranaki Maari and Manaia fields could hold another 20 million to 90 million barrels of oil, according to one of the joint venture partners.

New wells costing hundreds of millions of dollars could potentially double the field life, to as late as 2040, according to one of the partners, Cue Energy, with several new wells possible next year.

The Maari partners have spent about $1.5 billion on the field since 2005, and anticipate to fully recover that sometime this year, just four years after it began producing oil.

Maari’s main shareholder, and field operator, OMV, paid about $200 million in tax and royalties last year, but once the costs of the field are fully recovered, that royalty payment to the government will rise.

At peak Maari produced up to 40,000 barrels a day but this has declined steeply, as expected. With new wells the partners hoped to lift daily production rates by perhaps “a couple of thousand barrels” a day, from 13,000 to 14,000 barrels of oil and gas combined, OMV said.

The joint venture partners have earmarked $600m to spend on new wells next year, including drilling more exploration wells, but a drilling rig has not been signed up yet.

“The money is earmarked in the budget, the money is ready to be released as soon as we have the final go ahead for the opportunities,” OMV New Zealand managing director Peter Zeilinger stated yesterday.

However Zeilinger would not confirm Cue Energy’s expectations that the field could hold another 20 million to 90 million barrels of oil.

The joint venture partners had identified “development” options at Maari including up to three replacement water injector wells and three development production wells, one in Manaia and two at Maari – six wells in total for about $400m.

At the earliest, drilling would begin in the June quarter of 2013, with four wells “pretty sure” and a maximum of nine possible “but there is a huge if”, Zeilinger said.

They also have plans for one exploration well at the Matuku prospect and a second optional exploration well, together costing about $100m.

They were also “firming up appraisal (well) opportunities” in Maari and Manaia, for two wells worth about $100m though they were not yet confirmed.

Cue Energy stated it thought Maari’s field life could be extended to beyond 2030 with four new wells, with the possibility it could run to 2040.

Cue Energy’s chief commercial officer, Alex Parks, said: “We are committed to New Zealand – it is a good long-life project.”

The exact drilling plans were subject to what the joint venture partners and operator OMV decide and would be guided by when drilling rigs were available, Parks said.

“But we see quite a lot of upside in the Maari field.”

The wide range of 20 million to 90 million barrels reflected the potential for a deeper oil find under the Manaia field in the F-sands, he said.

“If the appraisal well on the Manaia structure shows there is oil there, then it could actually be quite sizeable – tens of millions of barrels associated with that,” Park said.

“But that is a bit of an all or nothing”.

An exploration well is also planned for the Pike joint venture prospect in the first half of 2013, south of the main Maari field.

FIELDS OF DREAMS

Maari joint venture partnersMaari is about 80km off the coast of South Taranaki and has been a bonanza for joint venture partners.

The Maari field has produced about 18.2 million barrels of oil since production began in 2009.

When it first started , Maari was expected to produce about 50 million barrels over 10 to 15 years.

Field operator: Austrian company OMV with 69 per cent, Todd Energy offshoot, 16 per cent, Cue Energy, 5 per cent

– © Fairfax NZ News

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Submited at Tuesday, May 29th, 2012 at 2:00 am on Uncategorized by jessica
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