July 2019

Drilling advances

New Zealand’s faux ban
Jim Redden / Contributing Editor

This is not what a respectable offshore drilling moratorium is supposed to look like.

Just over a year ago, the administration of New Zealand’s newly installed prime minister, Jacinda Arden, slapped a moratorium on the issuance of any new offshore drilling permits, as part of a pledge to eliminate net greenhouse gas emissions by 2050. While the April 11, 2018, ban may have been intended to discourage new ventures by the few operators still having a foothold in the nation, the reality is anything but a full-blown retreat.

“New Zealand is particularly interesting. The government’s offshore licensing moratorium, implemented in 2018, had led many to write off the exploration potential of the country. But with a number of offshore wells planned over the next two years, things are heating up,” Adele Long, Wood Mackenzie’s Australasian senior research manager, wrote in a June 12 summary of the Australian Petroleum Production & Exploration Association (APPEA) annual conference in Brisbane, in late May.

While the moratorium does not affect onshore developments, given the paucity of land activity over the years, that concession is about as impactful as Manhattan issuing a fracing ban within the borough.

All of New Zealand’s oil and gas production, to date, comes from the sprawling Taranaki basin off the North Island, where the Petroleum Exploration and Production Association of New Zealand (PEPANZ) identifies more than 20 offshore producing fields. Producers include Maui, the nation’s largest gas field, which is celebrating its 50th anniversary this year.

Business-as-usual. Post-moratorium, WoodMackenzie particularly singled out Austrian giant OMV and Malaysia’s Tamarind Resources Pte Ltd, which have embarked on drilling programs around both the Maui and Tui offshore fields.

Some eight months after the moratorium was enacted, OMV on Dec. 28 closed on the estimated $790-million acquisition of all of Shell’s New Zealand upstream business, giving it operatorship of both the Maui and Pohokura fields, and a 82.93% share of a block in the Great South basin. The local subsidiary of OMV reportedly wrapped up a drilling program with the COSL Boss jackup rig on April 30. No specific future plans have been made available, but on March 29, OMV filed a still-pending request—much to the chagrin of environmental activists—to mobilize a rig to drill a frontier exploration well off Otago in the Great South basin.

Tamarind is launching a development drilling campaign, aimed at adding 6 MMbbl to 8 MMbbl of oil, and extending the life of its Tui field into the mid-2020s. The COSL Prospector semisubmersible was scheduled to have begun a 110-day drilling program in June, which will include no less than three Tui sidetrack wells. The firm three-well contract provides extension options for a possible fourth sidetrack development well and one exploration well.

Elsewhere, New Zealand Oil & Gas Ltd of  Wellington has been granted a three-year extension to its drilling program on the Barque prospect of the Canterbury basin, off Oamaru on New Zealand’s South Island. Ironically, the extension was awarded during the same month that the nation was putting the kibosh on new drilling permits.

Region upbeat. New Zealand aside, Wood Mackenzie’s Long said that one of the key takeaways from the APPEA confab was renewed confidence in the Asia-Pacific exploration sector, especially in gas-hungry Australia. Like its pseudo-neighbor, Australian operators confront their share of environmental pushback, but are anxious to provide feedstock for growing liquefied natural gas (LNG) exports and alleviate nagging domestic gas shortages, especially in the east.

“Back in Australia, smaller players are looking for capital to advance oil and gas opportunities, both onshore and offshore. Unsurprisingly, opportunities were being hawked on the fringes of Western Australia’s Bedout basin, home to the recently appraised Dorado field. Onshore Western Australia, gas prospects in the Perth basin were also up for grabs, following in the footsteps of the breakout 2014 Waitsia gas discovery,” Long said.

“Bight Petroleum and others are looking for partners to help fund high-risk exploration in the Great Australian Bight, probably the last big hope for whale-sized oil discoveries offshore Australia. This is likely to be a hard sell, as Equinor’s Stromlo-1 well is facing severe headwinds in its bid to get environmental approval.”

In a related development, Huisman of Schiedam, The Netherlands, is delivering an advanced HM 100 land rig (Fig. 1) to Australia’s Sirius Well Manufacturing Services (SWMS), which will be put to work at an ongoing coal seam gas development drilling project in Queensland, operated by home-grown Arrow Energy Pty Ltd.

Fig. 1. The largely automated and trailerized HM 100 rig is designed with a proprietary double-drum drawworks, delivering a 100-ton hoisting capacity. Image: Huisman.
Fig. 1. The largely automated and trailerized HM 100 rig is designed with a proprietary double-drum drawworks, delivering a 100-ton hoisting capacity. Image: Huisman.


The trailer-mounted rig provides automated pipe connection, tripping and casing running capabilities. The rig literally unfolds upon delivery to the wellsite and is ready to drill, thus reducing manual involvement with between-well moves taking less than 4 to 6 hr, according to the Dutch manufacturer. WO

About the Authors
Jim Redden
Contributing Editor
Jim Redden is a Houston-based consultant and a journalism graduate of Marshall University, has more than 40 years of experience as a writer, editor and corporate communicator, primarily on the upstream oil and gas industry.
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