Local firms eye decommissioning work
Taranaki’s oil and gas industry is seeking assurances they will get the chance to secure multi million dollar contracts to decommission the region’s offshore installations.
The issue has come to a head since the Government took ownership of the Tui oil field off the Taranaki coast in April, when it was abandoned by owners Tamarind Taranaki.
The Government then appointed UK-based oil field service company Petrofac to determine how the wellhead and the Umuroa floating production and storage (FPSO) vessel anchored there would be decommissioned.
The appointment of the foreign company has Taranaki oil and gas industry insiders fearing local firms could be bypassed for the lucrative work in favour of international contractors.
And if they miss out on that work they fear they’ll miss out on subsequent decommissioning work in the years to come.
Petrofac did not reply to emailed questions asking if Taranaki companies would be involved in shutting down the oil field.
However, a spokesperson for the Ministry of Business, Innovation and Enterprise (MBIE), which was facilitating the decommissioning for the Government, said they recognised the expertise and experience that Taranaki engineering firms had in providing services to the oil and gas industry, National energy resources spokesman Jonathan Young said the Government had allocated $151.8m to decommission the Tui oil field in the budget. But there was no indication local firms would be involved in the cleanup, he said.
Young said he had asked Energy and Resources Minister Megan Woods in Parliament on May 4 whether the Government had ascertained what capability existed in New Zealand to decommission the offshore Tui field.
‘‘As yet, I have not had a reply,’’ he said.
Young said Taranaki’s engineering community had established and serviced virtually all the onshore and offshore oil and gas production infrastructure. ‘‘The long-term decommissioning costs for Taranaki’s offshore installations stand at over $800 million, and it would be good if Taranaki firms could do the lion’s share of this work over decades to come,’’ he said.
‘‘If the Government don’t enable this to happen with the first, it’s difficult to see that Taranaki firms would have a look-in for the remainder,’’ he said.
However, in an emailed statement a MBIE spokesman said the ministry had not yet ascertained the capability of Taranaki firms being involved in the project.
‘‘MBIE has been approached by some who have an intimate knowledge of the Tui assets, and we welcome their willingness to be involved in the decommissioning process.’’
The decommissioning of offshore petroleum assets is a specialist activity, so MBIE needed to procure external technical advice to perform this role, he said.
The work involved multiple stages, including the demobilisation of the Umuroa FPSO, and the ‘shutin’ of the field.
The final stage would be plugging and abandonment of the wells and removal of the subsea infrastructure, the statement said.
The work will be subject to tender processes and will be procured using the usual tender mechanisms for NZ Government contracts.
The MBIE spokesman said he expected the eventual decommissioning of the Tui assets would be fully outsourced by way of a transparent open market procurement process, and the successful contractor would then be responsible for sourcing the many specialist providers needed.
The Tui oil field was abandoned by previous owners Tamarind Taranaki after the first of three wells failed to produce signs of hydrocarbons. The company went into receivership owing $300m to creditors, including the Government.