OMV's multimillion pledge to drill off Taranaki

JAMES WEIR
Last updated 05:00 17/11/2012

Relevant offers

National business

Sparks fly over 4G coverage ad claims Technical problems delay Warehouse Boxing Day sale FMA expects to settle with ASB US investor helps rental-return firm into new market SFF lowers debt and makes a small profit Boxing Day madness: Trolley shortage and shoppers fainting Fish farmers doing damage too - ECan It's strictly semen business Union campaign targets job security for meatworkers Colleagues regret Secret Santa calamity

Austrian oil giant OMV has made its second large investment commitment to New Zealand in a week, agreeing to pay for the drilling of the Matuku-1 prospect off the Taranaki coast late next year.

The well is expected to cost tens of millions of dollars and could be followed by a second well.

Matuku will be the first in a series of wells OMV is planning to drill in the Taranaki basin later next year.

Earlier this week, OMV New Zealand said it was about to buy a converted supertanker capable of storing 600,000 barrels of crude oil off Taranaki. OMV, operator and 69 per cent owner of the Maari oilfield southwest of Opunake, is soon to buy the Raroa, the ship that stores the oil the field produces.

The Matuku well will be drilled in 135 metres of water, going down to a depth of 4850m, targeting Kapuni sand structures.

OMV is negotiating to secure a rig to drill Matuku-1 in the third or fourth quarter of next year.

OMV has a 65 per cent stake in the permit, with Australian company Octanex holding the balance. As a result of a farm-in deal, Octanex will be free-carried through site-survey and drilling costs.

If the well is successful, the prospect could contain up to 65 million barrels of oil. The "wildcat" well in an untested area is to the west of the giant Maui gas field.

While the nearby Tui and Maui fields have been a success, other wells in nearby permits have been uncommercial, or come up dry.

But OMV says recent studies enhanced the view that the "prospect is robust". "It has perceived low risk associated with the existence of the structure, presence of suitable reservoir rock and adequacy of seal."

FIRM MADE STAGGERING RETURN ON ITS PAPER INVESTMENT

In the 1980s, David Ross was an investment manager with Wellington fund manager Leadenhall.

He was bought out by Leadenhall executive chairman Peter O'Neil in late 1988, and in 1990 Leadenhall was taken over, at no cost, by Southpac Investment Management in what was called an "arrangement".

At its peak, before the 1987 sharemarket crash, Leadenhall reported funds under management of more than $600 million on behalf of 240 clients. It had grown rapidly from about $300m in 1985. Its first client in the 1970s was Brierley Investments. Leadenhall gave Sir Ron Brierley a Vienna Regulator clock to mark a 10-year association.

In a charity investment race just months before the 1987 crash, Leadenhall's team, led by Ross, made a staggering 93 per cent return on its initial $100,000 paper investment, within just four days of the competition starting.

Ad Feedback

The gains reflected big jumps in Australian companies Hill 50 Gold and Network Film.

In September, just a month before the crash, Leadenhall won the investment race with a gain of 671 per cent on the initial investment. AMP managed 329 per cent in the same six months.

- BusinessDay.co.nz

Special offers

Featured Promotions

Sponsored Content