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Huge Potential In Offshore Taranaki Oil Fields

August 25, 2004

More than $5bn worth of oil may lie beneath the Pateke-2, Amokura, Tui and Maari wells off Taranaki. Pateke-2, owned by a consortium headed by NZ Oil and Gas, is the latest well to strike oil, with a 13m column found earlier this month.

NZOG believes the Tui well may hold 11m to 16m barrels of oil – with the nearby Amokura and Pateke wells understood to be of similar size, and which appear to be part of the same oil reservoir. This means the three wells between them have potential to produce 30m to 45m barrels of oil.

In addition, the Maari field to the south-east, in which OMV is the principal stakeholder, is believed to also contain around 45m barrels of oil. If oil prices stay above US$40 a barrel, the combined potential of the offshore Taranaki oil fields is more than US$3bn (NZ$5bn).

Energy analyst Chris Stone says development of the fields looks attractive at current oil prices “but the big issue is whether it’s still commercial should oil prices fall below US$25 a barrel.”

To put the size of the oil fields in context, NZ’s total oil consumption is around 35m barrels a year, so Pateke-2, Amokura and Tui wells have potential to keep the country in oil for more than a year.

Domestic oil production has declined to less than 10m barrels a year, with most coming from the Maui field. The onshore McKee oil field has produced more than 40m barrels of oil during its lifetime and is almost exhausted. Stone says the finds off Taranaki represent “a real opportunity” for NZ.

“If it can be brought on stream quickly it will have a material impact on NZ’s balance of payments, and could serve as encouragement for other companies to increase exploration activity.” NZOG is aiming for the first oil production from Pateke-2, Amokura, Tui field within 24 months.

Exploration Manager Eric Matthews says a key aspect of the Pateke-2 find is that the oil-water contact, or lowest known oil, is at the same depth as the Amokura well. This indicates the two wells, 4km apart, have drilled into the same pool of oil.  Matthews adds the quality of the reservoir is “superb,” which makes it more likely development will be economical.  

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