Tui Area Oil Development

Address to official open the Tui Area Oil Development Project.


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Hon Harry Duynhoven, Associate Minister of Energy, Bruce McKay, Chairman of Australian Worldwide Exploration, Reverend Albie Martin, distinguished guests.

Thank you for the invitation to the official opening of the Tui Area Oil Development.

I would like to congratulate Australian Worldwide Exploration and their partners on their success in developing the Tui field.

Many of you have traveled from other parts of New Zealand and from a number of countries to celebrate this achievement. I understand there are guests here today from Australia, Japan, Singapore, Norway and the United States. This reflects the international nature of the petroleum industry and the significance of the Tui oil field development.

The Tui oil field was discovered in late 2003 and has been developed quickly. Since then, not only has technical and commercial analysis of the discovery been carried out, but also the facilities to extract and process the oil have been built. This is an outstanding achievement by all involved with the project, and highlights that petroleum discovered in New Zealand can be commercialised in a very short period of time.

This is positive for the future development of the oil and gas industry in New Zealand. Our country, and Taranaki in particular, can provide the technical and regulatory support needed for the development of key energy projects.

This development has happened at a time when globally there is considerable pressure to access oil and gas resources and skilled personnel, and when international demand is escalating both equipment and services costs.

Here in Taranaki, the Tui field developers had to contend at times with atrocious weather and sea conditions. I am told that the worst sea conditions recorded in 25 years were encountered during this project.

The Tui project marks a number of firsts for New Zealand. They include the technology used to extract the oil - the sub-sea completion engineering solution, and the application of advanced drilling technologies to support the development of pumping stations located on the sea floor.

The engineering solutions designed for this extraction and processing facility encapsulate best industry practice, and have been designed to reduce the environmental footprint of the project.

This is the first offshore oil development facility to operate under New Zealand's new marine protection rules. The field operator and various regulatory authorities have worked closely to understand and implement the new rules. The strength of this relationship also ensured the development schedule remained on track.

Meeting all the requirements of this project meant overseas and local companies working closely together. That has given the opportunity for the transfer of new technologies and skills to New Zealand, and to raise our overall capability to address future industry project requirements.

New Zealand's liquids production has been on a downward trend since the Maui field production peaked in 1997, but that is about to change. This project, along with three others - Pohokura, Maari and Kupe - will reach peak production by about 2010 and bring 140 million barrels of new reserves into the market. The Tui field is significant in this, with its reserves of around 30 million barrels.

The oil and gas industry is very significant to Taranaki, contributing close to seventeen per cent of its GDP last year. Some 70 new permanent skilled jobs and new apprentice training scheme have been created by the Tui field development. It is estimated that every dollar spent by the industry here has a multipler effect of seven.

It is our government's objective to lessen New Zealand's reliance on fossil fuels. To that end, we are implementing many sustainable energy and transport initiatives. But clearly here, and worldwide, oil and gas will be required for the foreseeable future. A development like the Tui field brings many benefits to New Zealand, including the contribution to economic and job growth, regional development, and the positive effect on the balance of payments.

This development reinforces New Plymouth's reputation as a centre of expertise in the oil and gas sector, and the capability demonstrated in this project should encourage further investment in this region.

Congratulations once again to everyone involved with the development of the Tui field.