Petrocorp Exploration (Waihapa) Ltd. and partners are proceeding with second stage development of Waihapa gas/condensate field in New Zealand despite continuing legal and political problems over oil and gas issues in that country.
Meantime, a group led by Marathon Oil Corp. has spudded a wildcat off New Zealand, the second by a major U.S. oil company announced there this fall.
FIRST GAS SALES
Delivery of first gas from Waihapa, in the onshore Taranaki basin, to a power plant at Stratford, N.Z., in late September marked the end of 2 1/2 years of flaring during long term production tests.
First stage development, costing $8.4 million, entailed laying 4 mile, 7 4/5 mile parallel oil and gas pipelines to Stratford, installing permanent wellhead facilities and flow lines for five producing wells, and linking the wells to a manifold at the Waihapa B site where the gas is collected for market.
Waihapa joint venture partners, led by Petrocorp, are selling Waihapa gas to Electricorp for the Stratford power plant under a short term contract of 10.4 MMcfd.
Second stage development plans, costing $30 million, call for constructing permanent production facilities and extending the oil pipeline to the Omata tank farm at New Plymouth, N.Z. Condensate from long term production testing has been trucked to the tank farm.
The new production center is to go on stream late in 1991 with initial capacity of 7,500 b/d, expandable to 15,000 b/d if needed for production from other fields in the Ngaere license contiguous to Waihapa or adjoining petroleum licenses such as Tariki and Ahuroa.
DELAYS
The Waihapa project has been stymied by lengthy licensing procedures as well as a legal dispute over ownership of the contiguous Ngaere license.
Gas flaring, which began in February 1988 under an initial term petroleum mining license (PML), persisted while Petrocorp sought a market amid uncertainties over gas deregulation (OGJ, May 29, 1989, p. 106).
Flaring was reduced to minimal levels after the Waihapa joint venture received a specified term PML in July 1990. The joint venture had negotiated the gas sales contract with Electricorp in 1989 but was forced to await the permit before sales could begin.
Production testing during the year ended June 30, 1990, averaged 5,871 b/d of liquids with a gas:oil ratio of 1,000:1.
Waihapa reserves are estimated at 19 bcf of gas and 12.5 million bbl of liquids.
LICENSE DISPUTE
There has been no drilling or seismic work by operator Petrocorp on the Ngaere license for 2 1/2 years because of a dispute over the license's status.
David Butcher, minister of energy last year, granted title to the Ngaere license to himself, representing the New Zealand government. His actions were upheld by the New Zealand High Court in October 1989.
Last August the New Zealand Court of Appeals reversed the high court's judgment, invalidating the minister's action and validating the Waihapa joint venture's original title to the license, thus allowing production to proceed this year.
However, Butcher announced he would appeal the appellate court ruling to the Privy Council in London just before New Zealand's general election late last month. The new minister of energy, John Luxton, took office after his National Party scored a landslide victory in the Oct. 27 election.
"The crown is the major beneficiary in the Waihapa joint venture, where it is the largest participant, holding a 38.36% interest, and this interest would carry through if the extension of the Waihapa license over the Ngaere area were granted," said John Holdsworth, chairman of Southern Petroleum NL, a 22.6% partner in the Waihapa license.
Holdsworth urged the government to reconsider its appeal to the Privy Council and allow the joint venture to proceed immediately with appraisal and development of the Ngaere area. Holdsworth further called for expeditious development of New Zealand's petroleum resources in the light of rising oil prices.
Other interests in PML 38140 are held by Petrocorp Waihapa 28.34%, Nomeco NZ Exploration 5%, Bligh Oil & Minerals NZ Ltd., and Carpentaria Exploration Co. NZ Ltd. 2% each, and Petrocorp Exploration (Taranaki) Ltd. 1.7%.
MARATHON WELL
Marathon targets Kapuni pay with its 1 Motueka, about 60 km north of Nelson, South island, China's Xinhua News Agency reported.
The well, about 90 km south of Maui gas field, is expected to cost $6 million.
Marathon will pay all costs and earn a 62% interest in the Motueka license area in return, Xinhua said. Spud date, planned well depth, water depth, and partners are not disclosed.
Sun International Exploration & Production Co. Ltd. plans to spud a wildcat next month on its Kahawai prospect off North Taranaki after taking a farmout on three licenses from New Zealand Oil & Gas Ltd. (OGJ, Oct. 1, P. 30).
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