Concerns as new oil well operator rises from ashes of liquidated Tamarind

Last month, construction ship Sapura Constructor cut and removed the last two wellheads of the defunct Tui oil field in the last steps of the expensive task of decommissioning the field.

Now, it’s emerged the same executives who ran Tamarind Resources into liquidation are back operating the company’s oil and gas permits in Taranaki again – just under a new company name.

It’s expected to prompt ministerial scrutiny.

And Labour MP Megan Woods, the former energy minister, is calling for tighter controls. “New Zealand taxpayers were left holding a nearly half a billion dollars baby.”

It’s unfortunate timing for the Government, after Energy Resources Minister Shane Jones sought advice on offering oil and gas investors an insurance policy that would pay their costs if they were forced to pull out of exploration and production.

It was the Tamarind fiasco that prompted the previous government to pass a law in 2021 placing a backstop obligation on original oil and gas permit and licence holders to pay for the decommissioning and clean-up of oil and gas wells they developed.

Now, concerned that a perception of policy flip-flops is scaring off longterm investment, Jones is looking to roll back those obligations. “I’ve asked officials to help overcome perceptions of sovereign risk,” he told the Herald this week.

Megan Woods says Tamarind first acquired its oil and gas permits without going through all the proper checks, and she is seeking assurance that those were conducted this time round, when the permits were transferred to the new company, Matahio Energy NZ.

She took extensive legal advice as minister. She says the permits were previously operated through “shell companies” owned by Tamarind. “There was enough separation in them as entities for them not to wear the liability of the collapse.

“Not wearing the liability is one thing. But I would have thought there’s a whole lot more subjective decision-making MBIE could make about again granting permits – and who it is that they’re granting those to.”

Newsroom spoke with Tamarind Taranaki’s receiver, John Fisk from PwC, about the liquidator’s sale of six oil and gas permits to Matahio. “Yes, there are people that have been involved in the company that went into liquidation and receivership that are also involved in the onshore assets,” he says.

Matahio acquired six onshore oil and gas licences in the Taranaki Basin in May last year, after a protracted approval process. The “prolific, well established” Cheal, Cheal East and Sidewinder fields produce 1,500 barrels of oil equivalent per day, and the company has told investors they should generate positive cash flow until 2030. It’s also drilling an exploratory well in the Puka field, another it acquired.

Newsroom has confirmed those licences (valued at $30m when previously sold in 2018) were purchased out of the liquidation of Tamarind Resources Pte Ltd, the parent company that was headquartered in Singapore.

Then this year, Matahio completed its acquisition by buying the remaining 30 percent of the Cheal East permit, PMP 60291, from minority Canadian shareholder East-West Petroleum, for just US$1 million (NZ$1.62m). That deal still requires ministerial sign-off.

“Under Matahio ownership, cash contributions will continue to be made to an escrow fund that ultimately covers future abandonment liabilities,” said Matahio chief executive Dr Wai-Lid Wong.

Kuala Lumpur-based Wong was previously chief executive of Tamarind Resources. It was he and the board that first put Tamarind Taranaki, their subsidiary that owned the Tui offshore oil field, into administration and ultimately liquidation.

They followed by putting the Malaysian-owned parent company into receivership in a failed bid to fend off a wind-up action taken by creditor BW Umuroa Ltd, which hadn’t been paid for the charter of its floating production and storage ship in Taranaki.

That’s all revealed in a Singapore High Court judgment. The receivership, said Judge Choo Han Teck, “makes it clear that the defendant is not solvent”.

(BW Umuroa also ended up in liquidation).

Despite the disastrous collapse of Tamarind Taranaki and its Malaysian parent company Tamarind Resources, there was a sister company that was allowed to continue operating: Tamarind NZ Onshore, which operated the parent company’s onshore oil and gas permits.

When its parent company Tamarind Resources was liquidated, Tamarind NZ Onshore was acquired by a start-up named Matahio – which was set up and financed by the Asia arm of Massachusetts private equity firm Orchard Capital Partners.

It’s no coincidence that Orchard had been the investor that previously financed Tamarind. Because its $66m debt was secured, it was one of the few creditors to get its money out when the company was liquidated.

Orchard’s partner Ernest Lee and senior portfolio manager Sam de Meyrick sit alongside Dr Wai-Lid Wong as directors on Matahio’s board.

Wong, the former Tamarind chief executive, is the new company’s chief executive and executive director.

Matahio’s executive leadership team is similar to Tamarind’s. It has the same chief financial officer in Perth-based Susan Prior, the same commercial boss in Stephane Bigard, the same Philippines country manager in Edgar Cutiongco, and the same chief operating officer/head of development in Rob Fisher.

All but Fisher downplay their previous roles at Tamarind, in their LinkedIn profiles. Fisher, it seems, has forgotten to update his description of his role at Tamarind, which his profile describes as “a rapid maturing oil and gas operator”.

He discloses he was responsible for decommissioning planning. “The coming years will no doubt be exciting as the company grows and we bring the concept work we’re evolving now into execution.”

Drew Cadenhead has been promoted onto Matahio’s executive from Tamarind’s onshore subsidiary, as New Zealand country manager.

Beyond having the same financier, and the same leadership, Matahio’s listed address is just down the busy Robinson Rd in Singapore, from the former Tamarind head office. And now, it’s operating the same onshore oil and gas wells – despite the liability the parent company left when it abandoned the Tui offshore field.

“It comes back to the fundamentals of company law, which is separate legal ownership and limited liability,” says John Fisk.

That is intended to encourage people to take business risks, he says. “If there’s something that has happened that’s illegal, or if there’s a banning order against the directors, then obviously you can stop people. But otherwise, the sole purpose of limited liability is, you set up an operation, you take risks, sometimes those risks don’t come off and the company fails.

“But the directors, unless they’ve breached some sort of law that would stop them from being a director of another company, can carry on.”

Jones wasn’t commenting yesterday on the return of the Tamarind executives, but his office provided a response from MBIE officials.

John Buick-Constable, the national manager of petroleum and minerals, confirms Orchard Capital Partners is the secured creditor in respect of Tamarind Group’s New Zealand assets.

“Changes of control were granted to Matahio relating to five onshore permits previously operated by subsidiaries of the Tamarind Group parent,” he says.

Operational staff on the ground in Taranaki, including key staff who originally worked for the permit operator that preceded Tamarind (Tag Oil NZ Ltd) remain working the five permits.

“The current operators of the assets have a good track record. Securities (escrow accounts) are in place for the two Cheal permits, and other security packages will be sought as part of ongoing decommissioning obligations.

“All statutory tests relevant to the changes of control of the permits (technical and financial) were met.”

Buick-Constable says: “The directors of Tamarind who put the company into liquidation are not directors of Matahio.”

While it is correct that Wong was not a director of Tamarind, at the time, he was chief operating officer. A letter filed as evidence in New Zealand High Court proceedings says it was Tamarind’s founding chief executive Ian Angell and Wai-Lid Wong who called in their Taranaki subsidiary’s administrators, Borrelli Walsh, in 2019.

This week, Wong confirms Matahio has established an arrangement with the Crown in which the company contributes to an escrow account that will fund future decommissioning obligations.

“Matahio is currently the only oil and gas operator in New Zealand that is contributing to an escrow account to fund its future decommissioning obligations, providing the Crown with financial security around these obligations,” he adds.

“Alongside this, Matahio has a process for the gradual ongoing decommissioning of assets.
Matahio’s focus is to work collaboratively with New Zealand’s local and central government, its employees, Taranaki iwi, local suppliers, landowners, and other stakeholders to ensure the safe and efficient operations of our assets in the region.

“We have been at the forefront of New Zealand’s net-zero targets, working closely with Energy Resources Aotearoa, and are a signatory of Energy Resources Sector Net Zero Accord. A cornerstone of this plan will be to use our strong operational expertise to reduce the carbon footprint of the sites we have acquired.”

Correction: A previous version of this article said Drew Cadenhead had previously worked at Tamarind Taranaki. In fact, he worked at Tamarind NZ Onshore from 2020.