Oil from new field likely by next year

By CHRIS DANIELS energy

Oil could be flowing from New Zealand's newest oil field by the end of next year, after the best hopes of NZOG shareholders were confirmed by latest test results.

The Amokura-1 well, drilled in waters off the Taranaki coast, last week struck an oil field 12 metres high (the height of the "oil column".)

Laboratory analysis will confirm the size of the oil field and how it relates to other nearby oil finds.

"The joint venture is investigating the combined development of the Amokura and Tui oil fields," the company told the NZX.

The Tui-1 well in February last year discovered a 10m column of light oil.

Amokura -1 will be closed up so that it can later be re-entered, with a new hole drilled and then used for production. Suspension will be completed towards the end of the week, then the Ocean Bounty drilling rig will move 70 kms south to drill Pukeko-1.

NZOG exploration manager Eric Matthews said the quality of the Amokura oil was "excellent", with a "100 per cent nett to gross", meaning that all rock in the reservoir could contain oil.

Drilling on the Pukeko well will begin in the middle of next week and take around one month to finish. This well will target a series of reservoirs each with potential reserves of more than 80 million barrels.

US company Transworld owns 45 per cent of the Amokura well and is the operator, while Australian company AWE owns 20 per cent. Pan Pacific, which is listed in Australia and New Zealand, owns 10 per cent and Japan's Mitsui 12.5 per cent.

In a further sign that overseas companies are looking more favourably on the Taranaki basin, AWE, which is listed on the Australian Stock Exchange, yesterday said the New Zealand Government had granted an expansion of its licence area.

The expansion aimed to secure "additional prospective acreage along the emerging oil fairway in the western Taranaki Basin." said AWE managing director Bruce Phillips.

"Exploration activity in the Taranaki Basin over the past 12 months has highlighted the oil potential of the area, particularly after the discovery of the Tui oil field and more recently the Amokura oil field."

He said an "emerging oil trend" had been identified in the area.