Oil production from the newly developed Maari field offshore in south Taranaki is up to 26,000 barrels a day, and a third production well which has been drilled is being hooked up to the wellhead platform and the FPSO Raroa. The next phase of the drilling campaign is to drill three water injection wells. Sydney-based Horizon Oil, a 10% stakeholder in Maari has advised shareholders the first two production wells are flowing clean oil with 25% production chokes at a peak combined rate of over 26,000bopd. The flow rates have been strong enough to require the first oil cargo lifting to be brought forward to early April rather than later in the month. Maari production is due to be ramped up to 35,000 barrels a day in the next few weeks. Meanwhile in offshore north Taranaki the Tui wells are still producing around 20,000bopd, and the partners including NZ-listed NZ Oil and Gas expect production to reach the 9m target for the year “comfortably.” Flows from Tui are gradually declining as predicted, but at a much slower rate than when the field was commissioned in July 2007.

Although oil prices have retreated from the peak levels reached last year of close to $US140 a barrel, the Tui partners are getting the benefit of prices benchmarked against Tapis crude, which unlike the volatility prices for Brent or West Texas crude have been relatively stable. Translated back into NZ dollars returns from its 12.5% share have been running at about $90 to $100 a barrel for NZOG, higher than at the time Tui was first commissioned. In the coming production year, NZOG’s revenue stream which might have tailed off as Tui production declines will instead be boosted from its share of first production from the offshore Kupe gas/condensate field. The Tui field has been such a successful venture for the partners they are planning to drill two adjacent prospects in the hope if oil is discovered it can be tied back into the existing production facilities abroad the FPSO Umuroa. Before this the Tui operator AWE plans to use the contracted drilling rig Kan Tan 1V to drill the Hoki prospect in a permit to the west of the Tui fields.

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