Crown seeks US$100m from Tui operator; Prospector moving on

The Umuroa, which produces and stores oil from the Tui oil fields. Tui's owners, Tamarind Taranaki. Photo / Supplied

The government is claiming US$100 million ($156m) from the operator of the Tui oil field, as efforts continue to keep the field in production and stave off early decommissioning.

Sixty-nine creditors of Tamarind Taranaki, which halted an in-fill drilling campaign at the offshore field in September, have lodged claims for $198m with administrators Singapore-based Borelli Walsh.

The administrators have spent the past week in talks with BW Offshore, operator of the field's floating production vessel Umuroa, to try and maintain production through to March.

The COSL Prospector, the rig Tamarind brought in for the three-well programme at Tui, raised its anchors yesterday and is preparing to relocate for a drilling programme OMV plans in Taranaki waters.

Once the rig has moved off, production from Amokura can resume, providing another 300 barrels a day to help restore the operation's viability, the administrators told creditors in New Plymouth yesterday.

If a deal with BW Offshore can't be done, Tamarind Taranaki will be liquidated.

Officials from New Zealand Petroleum & Minerals were at yesterday's creditors' meeting. As regulators of the Crown's petroleum interests they are keen to avoid early decommissioning but want to ensure that Tamarind meets that cost if it is required.

Yesterday's meeting heard the cost of decommissioning was estimated at about US$110m.

NZP&M is part of the Ministry of Business, Innovation and Employment. A spokesperson for the ministry confirmed officials' participation at the meeting but declined to comment on those discussions or any claims the Crown has lodged with the administrators.

Tui lies in 120 metres of water about 50 kilometres off the Taranaki coast. Once New Zealand's biggest oil producer, it produced about 693,000 barrels last year, according to government data - almost 1,900 barrels a day – from three sub-fields – Tui, Amokura and Pateke.

Kuala Lumpur-based Tamarind Resources, an expert in late-life oil and gas assets, acquired the field in 2017 with the intention of eking out a few more years' production.

The Prospector arrived mid-year but Tamarind Taranaki halted drilling after the first of three planned wells came up dry. The Prospector drilled a side-track well from the Tui-3H well and has been anchored over the field's Amokura wellhead since then. With the Tui and Amokura wells shut-in, production from the remaining Pateke wellhead is insufficient to keep the operation viable.

Creditors heard that Tamarind needed about $4m a month to maintain operations, and that the administrator aimed to get that down to $1.5m.

An oil cargo was due for lifting later in the year and the administrator was aiming to keep those proceeds.

In September, Taramind Resources completed the purchase of TAG Oil's onshore Taranaki assets, which include the producing Cheal and Sidewinder fields.

The ability of the broader Tamarind group to meet its parent company guarantees to NZP&M and BW Offshore is unclear. Creditors heard that the onshore assets were good and were making money.

OMV is planning a three-well programme off Taranaki and is also awaiting approval to drill a well in the Great South Basin off the Otago Coast this summer. It has had the Prospector contracted for the work for some time and tried to bring forward its drilling programme after the surprise early halt to the Tamarind work.

The Prospector will head north-east to a permit OMV owns with Malaysia's Sapura Energy. It will drill the Gladstone-1 well, which lies about 35 kilometres off the coast north-west of New Plymouth. That work is likely to get underway in a couple of weeks.