Pohokura-2 well promises riches

Fletcher Challenge Energy and its partners appear to have again struck it rich with their second Pohokura well off north Taranaki.

Fletcher Energy has taken the first of two core samples, with the second due this weekend, from the Pohokura-2 well, about 8.5km off the coast from the Methanex Motunui methanol complex.

Oil companies do not spend the time and money taking core samples unless they are confident test results will point to a commercial find.

The Pohokura partners - Fletcher Energy, German firm Preussag Energie, Shell Petroleum Mining and Todd Energy - hope this well will confirm Pohokura as New Zealand's third largest gas discovery after the offshore Maui and onshore Kapuni fields.

"Everybody is quite excited, everything is coming in as planned," Fletcher Energy spokesman Stephen Jones said.

"The core samples will be analysed and the well logged before a decision is made whether to production test this well or not, from perhaps the second week of June."

A third well was likely to be drilled later this year to test the southern limits of the 37km field, which Fletcher Energy believed could contain up to 500 billion cubic feet (bcf) of gas, about twice New Zealand's annual gas consumption.

However, industry analysts said that figure could be as high as 620bcf, which would be enough to fire the Methanex Motunui and Waitara Valley methanol plants for seven years.

Mr Jones said the partners were continuing talking to major gas users about markets for Pohokura gas and any decisions about development options for the field were several months away.

It is understood development of the Pohokura field is likely to be a two-tiered affair, with as much drilling and production facilities completed from onshore.

This would be the cheapest option and mean economically priced gas for major users such as Methanex. The more expensive offshore development could be delayed several years.

The Ensco 50 jack-up rig is likely to leave New Zealand after completing Pohokura-2, which is designed to test the northern limits of the field.

The Pohokura project has already found higher-than-expected flows of associated condensate (light oil) - more than 1100 barrels a day - from the Pohokura-1 well.

This points to the possibility of extracting up to 25 million barrels of condensate - worth more than $1 billion - from the field.

Pohokura-2 will take another week to reach the deepened 3900m target depth, targeting the same gas-bearing Maui sands within the Kapuni formation as did the Pohokura-1 well earlier this year.

-NZPA