While not yet finalized, costs for the project are likely to be above the US$150 million cap (about NZ$220 million) previously estimated, reflecting heavy demand for products and services in the industry, NZOG says.
Initial production rates from the Tui area are expected to be in excess of 30,000 barrels of oil per day, which NZOG says should result in rapid payback of the investment, based on forecast oil prices of US$35 per barrel during the project life (currently oil is more than US$58 per barrel).
Partner Australian Worldwide Exploration Ltd (AWE) says that bid packages for the major elements of the Tui project were prepared and issued in the past few months with responses due by the end of July.
The proposed oil development in PEP 38460, which is operated by Houston-based Transworld Oil, through its local subsidiary New Zealand Overseas Petroleum Ltd, would draw from three fields; Tui, Amokura, and Pateke. They are located 40 km off the Taranaki coast, north-west of the Maui gas field in about 115 m of water.
Front end engineering design (FEED) was based on four subsea production wells producing to a floating production storage and offloading (FPSO) vessel.
The Ocean Patriot has been contracted from Diamond Offshore to drill the four development wells, with an option for the joint venture to drill up to three exploration wells in the Tui vicinity. The rig contract was executed ahead of the final investment decision because of the rapidly tightening offshore rig market.
A petroleum mining permit application has been lodged with Crown Minerals for the Tui development.
Meanwhile, in other offshore Taranaki exploration, NZOG says that processing of 3D seismic in PEP 38483, over the Hector prospects, is expected to be completed in August. Seismic interpretation and evaluation will follow as soon as the processed data become available, ahead of a decision on drilling.
In PEP 38729 (operated by NZOG) offshore north Taranaki, mapping and depth conversion studies of reprocessed seismic show strong evidence of a trapping structure on the Felix prospect. Further studies will be made ahead of a drilling decision.
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