An extra five million barrels of oil - worth around $850 million at current prices - are expected from the Tui field off Taranaki following the extension of the charter for the project's production.
New Zealand Oil & Gas said yesterday that the charter for the Umuroa hadbeen extended by up to more than five years through to December 2022.
The operator of the project, Australian Worldwide Exploration, has assessed that this extension is expected to allow at least five million barrels of additional oil to be recovered from the known Tui field reservoirs, bringing the proven and probable reserves to at least 47 million barrels.
Under the contract with Prosafe Production, the owner and operator of the Umuroa, the fixed term of the charter has been extended by 3.4 years to December 31, 2015.
After that date the Tui joint venture now has seven, one-year options to extend, giving a maximum term of 15.4 years from the date of first production.
Previously the charter fixed term was for five years, with five one-year options to extend.
The charter extension will maximise the value of any further oil discoveries in the area. NZOG said the four existing Tui field production wells continue to perform strongly, with production still at close to 45,000 barrels a day despite rising water production.
On current prices the daily output of sweet light crude a day from the field is returning the field partners around $7.5 million a day on the Tapis market.
Since the start of production on July 30, 2007, the Tui project has produced about 12.6 million barrels of oil.
