KEY POINTS:
The Tui oil field joint venture said today it expects to extract an additional 5 million barrels from the offshore Taranaki field.
It has negotiated an extension of the term of the charter for the production storage and offloading vessel, Umuroa, to the end of 2022.
Since the start of production on July 30, 2007, the Tui project has produced about 12.6 million barrels of oil.
The Tui owners are: NZ Oil & Gas (12.5 per cent), AWE New Zealand Pty (42.5 per cent), Mitsui E & P New Zealand (35 per cent), and Pan Pacific Petroleum (10 per cent).
New Zealand Oil & Gas earlier this month reported March quarter revenue of $58.2 million, lifting revenue for the nine months to $153.7 million, including revenue of $141.8 million from the Tui oil field.
In February the company paid its first dividend in a decade. Exports from the Tui field are also having a bit impact on New Zealand's terms of trade, helping turn trade deficits into a surplus.
Field operator AWE say the extension of the ship charter "will allow the Tui joint venture to produce substantial additional oil from the Tui field and will also maximise the value of any further oil discoveries in the area."
That would bring the proven and probable reserve to at least 47 million barrels. At today's price of US$129/barrel, the field would be worth nearly US$19 billion ($25 billion).
Under the contract with Prosafe Production, the owner and operator of the Umuroa, the fixed term of the charter has been extended by 3.4 years to December 31, 2015.
After that date, the Tui joint venture now has seven, one-year options to extend, giving a maximum term of 15.4 years from the date of first production.
Previously the charter fixed term was for five years, with five one-year options to extend.
The four existing Tui field production wells continue to perform strongly, the company said.
Oil production has remained at close to 45,000 barrels a day despite rising water production.
Studies into modifications to the Umuroa to increase water handling capacity to 150,000 barrels a day and to accommodate the 11 planned Tui 4H production well are under way.
- NZPA, NZ HERALD STAFF
