Maari a well worth waiting for

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Lonely field: The Maari production platform feeds oil to the Raroa in the background.

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A big party was held in New Plymouth late last week to celebrate another major offshore energy project.

This time the project is Maari, the oilfield 80 kilometres off the South Taranaki coast, which is now producing more than 20,000 barrels of oil a day - and which will soon be producing even more.

Almost 100 guests, including Energy and Resources Minister Gerry Brownlee, attended the dinner to celebrate the successful completion of the $1 billion project.

Maari was worth celebrating because it has been a long time coming.

Oil was discovered in the area in 1970, but at the time it was considered to be uneconomic to develop because poor reservoir quality meant oil production rates were too low.

But in 1983, new-age exploration techniques resulted in discovery of the Maari field - and this time the flow test results indicated it could be commercial. Maari 1 and 1-A wells drilled in 1998 and Maari- 2 drilled in 2003 confirmed this, and it was finally decided in 2005 that the field should be developed.

Production began almost exactly a year ago, and it is now pouring out of a total of five wells before being piped to a floating production and storage ship, the Raroa, anchored nearby. Every fortnight big tankers arrive to take on board thousands of tonnes of the Maari crude for export overseas.

It's a well organised and lucrative operation for the joint venture owners of what is New Zealand's largest oilfield - and it will get better. At present the production is running at 23,000 barrels a day, but when another well drilled into the newly discovered Manaia structure nearby is brought into production, it is expected the total flow will be at least 30,000 barrels a day.

Last week Mr Brownlee was full of praise for the Maari field, which has now produced 6.5 million barrels of oil in its first year of production.

"The Maari field is making an important contribution to the New Zealand economy and development of the Taranaki region," he said.

"Last year the Crown received nearly $1b from petroleum production, with $543 million coming from royalty payments alone."

Maari is also proving lucrative for the field's operator, Vienna-headquartered OMV.

The company has had an involvement with New Zealand since 1999 when it acquired the Australian company Cultus, which at that stage held a 30 per cent interest in Maari.

In 2002 it not only bought a 10 per cent interest in the Maui gasfield from Shell, but it also bought Shell's equity in Maari which increased its interest in the field to 69 per cent.

Then a year later OMV acquired the international upstream assets of the former German mining company Preussag Energie, which included a share in Taranaki's Pohokura gas discovery.

All that means that today, OMV New Zealand holds 69 per cent of Maari, 26 per cent of Pohokura, and 10 per cent of Maui - which combine to account for 10 per cent of its parent company's total hydrocarbon production.

And that's saying something, considering that OMV is one of Austria's largest listed industrial companies and the leading energy group in the European growth belt which supplies energy to more than 100 million people.

It is active in exploration and production in 17 countries on four continents, operates five refineries, runs a network of filling stations in Europe, and employs more than 40,000 people.

- © Fairfax NZ News