Production from the Tui oil field ended last year after operator Tamarind Taranaki was placed in receivership. Photo / ROB TUCKER
Production from the Tui oil field ended last year after operator Tamarind Taranaki was placed in receivership. Photo / ROB TUCKER
The government has seized control of the Tui oil field and hired an international contractor to advise it on the best way to decommission the assets off the Taranaki coast.
The field, formerly operated by Tamarind Resources, is shut in and last week the Environmental Protection Authority rejected a proposalto remove the floating production and storage vessel Umuroa without a full decommissioning plan in place for the field.
Production from the field ended last year after operator Tamarind Taranaki was placed in receivership. The field was nearing the end of its life even before the recent fall in oil prices but was closed off after drilling delays and a dry well left Tamarind owing US$320 million to creditors, including Umuroa operator BW Offshore.
That figure also included US$100 million being claimed from Tamarind by the Ministry of Business, Innovation and Employment to cover the cost of the decommissioning. Last month receiver PwC released its interest in the Tui assets, including the mining permit and any consents held to operate the field.
"The Crown has recently become the full legal owner of the Tui assets and has commenced work to manage the assets and plan for decommissioning," an MBIE spokesperson said.
"MBIE has contracted a company that specialises in the operation and decommissioning of petroleum facilities to establish the current condition of the Tui wells and to determine options to demobilise the FPSO and decommission the subsea assets.
"Once that work is available, MBIE expects to work with BW Offshore to determine the best way forward."
MBIE didn't name the contractor but it's understood to be it is Jersey-based Petrofac, which has already provided evidence to the EPA on the state of the Tui assets.
Tui, once New Zealand's biggest oil producer, comprises a series of seafloor wellheads. The Umuroa is anchored at the field and controlled the wells and received their output using a series of umbilicals and flow lines.
BW doesn't own those assets or the wellheads and had planned to disconnect the lines from the ship, purge them and cap them and place them on the seabed. The wells are already shut.
But earlier this month, the High Court overturned an Environment Court ruling that BW could rely on a 2017 approval to disconnect the Umuroa and its 40,000 barrel cargo to avoid the risk of having the vessel remain at the site unmanned, and potentially uninsured, over the winter.
Tui, once New Zealand's biggest oil producer, comprises a series of seafloor wellheads. File photo
The High Court ruled the decommissioning of the field was too important to be handled in a "piecemeal" way and that the Environmental Protection Authority needed to complete its full assessment of the risks involved.
The EPA did that last week, declining to allow the disconnection to proceed given the lack of information it had on the state of the Tui wellheads.
Despite the wells' production being 97 percent water, and BW Offshore believing there was no flow in the wells, the authority ruled that it could not rule out the effect of a potential leak being more than minor, even though it acknowledged that such a leak might occur over many years.
Petrofac had noted that the field was not being suspended in accordance with normal industry practice, which would have included "killing" the wells so they would not flow, adding additional barriers if necessary and verifying the ability of those barriers to contain any reservoir fluids.
"Having extensively engaged with both Tamarind and BWO since late 2019, the EPA is not aware of the existence of, and has not been provided with, an overall plan for bringing the activities of the Tui field to an end," Ben Moginie, a senior advisor with the authority, said in his decision.
"Without an overall plan for bringing activities to an end, I consider that there is too much uncertainty in the information that is available to determine whether the adverse effects on the environment or existing interests of the proposed activities are likely to be minor or less than minor."
