AWE Secures Rig, Sets Sights on 5 Tui Prospects

The Operator of the Tui area oil fields, Australian Worldwide Exploration (AWE), announced that agreements have been executed to secure the services of the semisubmersible drilling rig Kan Tan IV.

The Kan Tan IV is expected in Taranaki waters in the third quarter of 2009. Within the Tui permit area there are five potentially attractive prospects near to the existing producing reservoirs.

NZOG's Chief Executive, David Salisbury, said that the five prospects near Tui are currently estimated to contain 50 million barrels, a similar amount to the 50.1 million barrels, the field's present proven and probable (2P) reserve estimate.

AWE has announced that at least two of these are expected to be drilled by the Kan Tan IV, with additional rig time likely to be available for follow-up drilling.

Final selection of the wells to be drilled has not been made and remains subject to joint venture approval.

Background for Tui Oil Project

In early 2003, AWE participated in the Tui-1 oil discovery in the Western platform region of the offshore Taranaki Basin, New Zealand. The oil discovery was delineated in the secondary objective Kapuni "F" sandstone reservoir, where a thin oil column was encountered. Following the Tui discovery, a 350 square kilometer 3D seismic survey was acquired over the Tui field and the surrounding area.

In early 2004, a multi-well appraisal and exploration program was initiated, with further exploration success at both the Amokura-1 and Pateke-2 wells within the same reservoir sequence. The Tui Oil Project was declared commercially viable in 2005. A Final Investment Decision was made by the joint venture in November 2005.

The operator, AWE holds 42.5% interest in the project. Partners include Mitsui with 35%, NZOG with 12.5% and Pan Pacific with 10% interest.

Ongoing Production Development

Tui oil is produced from four wells, linked to a leased Floating Production Storage and Offloading vessel, the Umuroa FPSO. The Tui joint venture leases the FPSO, at an initial cost of approximately US$178 million for the first phase of the project.  The Umuroa FPSO has a storage capacity of 700,000 barrels of stabilized crude oil.

First oil production from the project commenced in July 2007, with initial production rates of 50,000 bopd being achieved, as planned. In the 11 months to the end of June 2008, the project produced 14.2 million barrels of oil. The project estimates that production of 9.0 million barrels will be achieved in the 12 months to June 2009.

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