OMV expects to invest more than $500 million in Taranaki in coming years to maintain production from the offshore Maui and Pohokura fields.

The firm, which in December took over operatorship of the two fields from former partner Shell, is embarking on a “tremendous increase in activity,” says Gabriel Selischi, OMV’s senior vice president for Asia-Pacific.

That starts this month with a series of well interventions at Pohokura to restore production from the offshore component of the field. Compression at the field off the coast from Waitara will also be improved.

But it is the ageing Maui field – in production for 40 years this year – that excites Selischi.

“We think there is a redevelopment potential in Maui,” he told BusinessDesk.

“One of our projects is to accelerate those opportunities.”

The company is hoping to make a final investment decision this year on a project to drill up to five wells from the Maui-A platform. The wells would be side-tracked from existing wells using a platform-based rig and could be delivering gas in 2020, Selischi said.

Maui, 35 kilometres off the Taranaki coast, was discovered in 1969 and brought into production a decade later. The field, one of the biggest in the world when discovered, has provided most of this country’s gas since and was still the country’s second-largest producer just three years ago.

But Maui is in decline and proven and probable gas and LPG reserves were estimated at 151 petajoules in January 2018. At recent production rates that could be exhausted by 2024, according to Ministry of Business, Innovation and Employment data.

Selischi understands the significance of Maui to New Zealand’s economic development and the near love affair some in the local industry have for it. If discovered today it would probably be developed for LNG export.

He is also aware some people still see “a lot of potential” at Maui. He muses that a Maui-C development would be nice, but Vienna-based OMV is taking a very conventional approach to further development there.

Shell extended Maui’s production through a series of side-track programmes since 2004.

Selischi says the future work at Maui-A, and a similar programme at the more westerly Maui-B platform, could extend production by five-to-10 years and into the late 2020s. The Maui-B work will probably require a jack-up rig and will take longer to plan.

New Zealand industry and households rely on four gas fields – Pohokura, Mangahewa, Maui and Kupe – which typically account for more than 85 percent of gas production. A prolonged outage at any of them, as occurred twice last year at Pohokura, can quickly tighten supplies and result in increased power prices and production risks for the country’s food, steel and wood processors.

Last year, the government banned new offshore exploration. It said the prohibition was necessary to reduce emissions long-term and that existing exploration permits would deliver sufficient new reserves to maintain security of energy supply. More than 80 percent of the country’s exploration acreage is outside Taranaki so any discovery can’t be delivered to the North Island’s pipe network.

OMV’s US$578 million purchase of Shell’s remaining New Zealand interests made it the country’s biggest oil and gas producer. It also operates the offshore Maari oil field and has exploration interests in Taranaki, off the Wairarapa coast and in the Great South Basin.  

Selischi observed that New Zealand has previously taken gas supplies, and the energy flexibility they provide, for granted. But a combination of ageing fields and a lack of recent discoveries mean reserve capacity is now tightening. Those pressures may increase over time as expansion of renewable electricity generation – particularly through variable wind and solar production – increases the need for flexible gas supplies.

While the firm’s East Coast and Great South Basin interests provide long-term options, Selischi says his focus is firmly on Taranaki. That will include two exploration wells there next summer.

He noted that, until last year, Pohokura’s availability had been very good at about 99 percent. As the field ages, more effort will be required to maintain production near its design plateau level. The field has further development potential, but the firm has no near-term plans for additional drilling there, he said.

The company will next week kick off a maintenance programme at Pohokura aimed at restoring production and reducing water cut – the ratio of water produced compared to the volume of total liquids – from some wells. Last month the firm said that was likely to halt production from the field’s offshore wells for about 12 days during February and a further 18 days during March and April.

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