Cheal oil field production boost planned

Several thousand barrels of oil a day may eventually be produced from a small oilfield at Ngaere in central Taranaki, if development plans come to fruition.

The field is Cheal, which has already produced more than 70,000 barrels of crude under test from the two wells drilled so far.

This success has prompted the field's owners, led by Wellington-based Austral-Pacific Energy, to draw up plans for further drilling from two sites - a project that may eventually see at least five wells drilled at each site.

So far two wells have been drilled - Cheal-A3 and A4 - at a site immediately to the east of State Highway 3 at Ngaere.

Now the field's owners are developing a Cheal-B site a kilometre to the north and intend drilling the first well there in February.

A three-dimensional seismic survey is also to be conducted over the area early next year, which will assist in the placement of future wells.

Austral-Pacific chief executive Dave Bennett said the Cheal wells were producing oil and gas from the same shallow geological formation, called Mt Messenger, that was producing oil and gas in the Ngatoro and Kaimiro fields in north Taranaki.

So far the Cheal oil has been transported by tanker to the Waihapa production station east of Stratford for processing and piping to the crude oil storage tank farm overlooking Port Taranaki.

However, this presented some difficulties because the Cheal oil is a lot waxier than Waihapa crude. So the field's development plan envisages mixing the oil with condensate, then transporting it directly to the tank farm.

Up until now, gas produced from the Cheal wells has either been flared or used to fuel a small electricity generator on the site.

"This generator set uses about one well's worth of gas," Bennett said. "If the Cheal site is fully developed, the rest will be sold into the national gas supply grid."

- NZPA