Oil and gas operator Tamarind Taranaki owes creditors around $190 million

The Umuroa, which produces and stores oil from the Tui oil fields. Tui's owners, Tamarind Taranaki, hit financial trouble this year when a drilling campaign was unsuccessful. Photo / Supplied

Tamarind Taranaki, the troubled Malaysian-owned oil and gas operator which was placed in administration last week owes creditors around $190 million.

The owner of the Tui oil fields 50km offshore of New Plymouth, Tamarind abandoned a drilling campaign in September after the first of three planned wells was unsuccessful.

Tui, for a time the biggest producing oil field in New Zealand, is close to the end of its life, with its former owners effectively paying Tamarind to take it off their hands because decommissioning the field would cost tens of millions of dollars.

Directors of Tamarind Taranaki warned on November 11 that it "may be insolvent" as they agreed to put the company into voluntary administration, meaning creditors will have to wait to be paid.

On Wednesday Tamarind's Singaporean-based administrators Borelli Walsh met with creditors in New Plymouth.

A person with knowledge of the meeting told the Herald that attendees were told that some 78 creditors were collectively owed $190m.

Borelli Walsh managing director Jason Kardachi said the figure was "about right".

Kardachi said he provided the meeting with "an overview of the situation and what we're trying to do".

The immediate focus was to get the support of key suppliers to continue production in the short term.

If that was successful, Kardachi would then attempt to gain finance to continue the drilling campaign in the hope of extending the life of the Tui fields for several more years.

Kardachi said he was still attempting to secure the support of several key suppliers to continue production to avoid having to place Tamarind into liquidation.

"We've reached an agreement with most of them but not all, which I'm working on and I hope to [secure] in coming days, for continued operation for a yet-to-be-agreed period of time."

Creditors mostly asked about the make-up of the creditors lists and how that would affect them if trading continued.

A creditors report would be prepared for a watershed meeting which is meant to be held within a month of the start of the administration, but which was likely to be postponed as administrators would not be in a position to propose a deed of company arrangement by then.

"All we're focused on at the moment is keeping things going as long as we can. That's not a proposal," Kardachi said.

If administrators can secure the support of creditors, production of Tui would continue into the early months of 2020. Beyond that, finance would be needed to conduct a drilling campaign to extend Tui's production life.

Much of the company's debts are believed to be owed to the Crown in the form of the liability to decommission the wells.

Kardachi said it was "very unlikely" that the Crown would withdraw support in the short term.

"We're in active dialogue with the Crown in relation to that and it's in their interests for us to continue what we're doing," Kardachi said.

"We're working with them and have their support at the moment."

A spokesman for New Zealand Petroleum and Minerals confirmed that officials were at the creditors meeting in New Plymouth on Wednesday but declined to comment on the discussions.

Last week Energy and Resources Minister Megan Woods said she would be concerned if the Government had to pay more than was agreed towards the clean-up of the Tui fields, with the former owners of the field providing Tamarind with around $30m towards the clean-up.

Woods said Tamarind had entered New Zealand through a loophole in the Crown Minerals Act because it had bought the company which was the operator of Tui, meaning officials did not have scope to test its financial and technical capability.

As a result the Government quickly amended the act to prevent the situation from happening again.

Tamarind later purchased onshore Taranaki oil fields from Canadian oil company TAG.