Pohokura oil well given approval by Fletcher

By FIONA ROTHERHAM

Fletcher Challenge Energy and its joint venture partners have given the expected green light to drill an appraisal well at the Pohokura gas discovery off the Taranaki coast.

Meanwhile, the Taranaki Regional Council has deferred until next month a decision on whether to prosecute the company, as the field operator, for three oil spills this month during testing of the Pohokura-1 discovery well.

Pohokura-2 will spud early next month to a target depth of 3800m. It will be drilled by the Ensco 50 rig already in New Zealand around 8.5km offshore from Motonui, north-west of the first well in the centre of the 37 sq km field.

It is the first of two appraisal wells required to establish Pohokura's ultimate commercial potential. Production is likely in 2003.

Results from Pohokura-1 reaffirmed field size estimates of 430 billion cubic feet, making it the third largest gas field after Maui and Kapuni.

The joint venture partners are FCE (33.3 per cent), German-based Preussag Energie (33.3 per cent), Shell (18.3 per cent) and Todd (15 per cent).

The well tested at stabilised gas rates of up to 17 million cubic ft per day with an associated 1200 barrels per day of valuable condensate (light oil). The oil rate was more than three times richer than first estimated. Condensate is sold on world markets at the same price as crude oil, at present around $US26 per barrel.

The commercial quantities of oil dramatically improve the field's economics and will speed development.

One option is to recover the oil to sell now and reinject the gas into the ground until later this decade when gas prices improve as supply tightens.

Pohokura-1 was plugged and abandoned rather than suspended as a ``future producer'' as originally planned. Fletcher Energy said this was because of technical reasons and had nothing to do with the oil spills that occurred during drill stem testing.

A company report on the spills went to the Taranaki Regional Council on Good Friday. A full report on the ``unauthorised discharges'' would be considered at a council meeting on June 7, said resource management director Bill Bayfield.

Recent fines for similar Taranaki incidents ranged from $5000 to $50,000, he said.

There appeared to be no long-term environmental damage.

Rick Webber, Fletcher Energy's NZ general manager, told a public meeting last week that the amount of oil spilled into the water was equivalent to slightly more than that carried in a car's petrol tank.

Mr Webber said, changes will be made to equipment and procedures for future well testing programmes.