KEY POINTS:
One of the country's biggest oil fields, Maari, has started producing.
The field 80km off Taranaki's south coast is expected to yield 50 million barrels of oil over its 10 to 15-year lifespan, about the same as the already producing Tui field closer inshore.
The Maari field operator, OMV, said oil started flowing yesterday afternoon in what was "an exciting day for the country and for the company".
OMV NZ managing director Steve Hounsell said "quite a few hundreds of millions of dollars" was spent developing the field over four years. He would have liked to have cashed in on record high oil prices last year but the field had a long lifespan.
"We're in the business for the long term, you take the good with the bad with oil prices and the chances are we'll see better prices in the next six months." Austrian-based OMV has a 69 per cent stake in the field, New Zealand's Todd Energy has 16 per cent, with the rest shared by Australian companies Horizon and Cue.
The commercial shipment of oil by tankers from the rig in 100m of water is expected in April.
The Government stands to be a big winner. Royalties paid from Tui, where oil production has been strong, are well in excess of $240 million a year.
Hounsell said the 150m-tall drilling rig had been in place at the Maari wellhead platform since November last year, and would drill a total of eight wells, five production and three water injectors. The oil - which is waxy - is heated throughout the process.
Two wells have been completed and the other production wells will come on stream over the next few months.
The floating production, storage and offtake vessel, converted oil tanker the Raroa, is ready to process the field's output. The vessel is anchored 1.5 km from the wellhead.
The first oil flow marks just over 25 years since the Maari field was first discovered.
