Tui Project: decommissioning the Tui oil field

The NZ Government has commenced work to manage the Tui oil field assets and plan for decommissioning of its wells in the wake of the financial problems affecting the permit operator Tamarind Taranaki Ltd.

Latest status

(As at 18 November)

MBIE has awarded a contract to Helix Offshore Services Limited for the plugging and abandonment of the wells in the Tui Oil Field (Phase 3 of the Tui decommissioning) following a following a competitive procurement process.

The company is a subsidiary of New York Stock Exchange-listed Helix Energy Solutions Group which is headquartered in Houston, Texas with regional offices in the United Kingdom, Brazil, Singapore and Perth.

The work is subject to regulatory approval by the Environmental Protection Authority (EPA).

MBIE has submitted an application for marine consents with the EPA for the removal of the subsea infrastructure and the plugging and abandoning of the Tui wells. An Independent Board of Inquiry is considering MBIE’s application.

Subject to EPA granting the marine consents, it is anticipated the plugging and abandonment work will be carried out from late 2022.

Contract awarded for final phase of Tui Oil Field decommissioning

In October, MBIE awarded a contract to Shelf Subsea for the removal of the subsea infrastructure.

MBIE press release – Contract signed for next phase of Tui Oil Field decommissioning

MBIE has submitted an application for marine consent so that it can proceed with the next phases of the decommissioning of the Tui oil field – the removal of subsea infrastructure and the plugging, and abandoning, of 8 wells.

An Independent Board of Inquiry appointed by the Minister for the Environment will consider MBIE’s application.

Details on MBIE’s application can be found here:

MBIE's application documents(external link) – EPA.govt

Project overview

The Crown is committed to ensuring that the field is decommissioned in the right way, in accordance with the law and good industry practice. 

The Crown is committed to comply with all environmental protection standards and other regulatory requirements in its management of the Tui oil field. The Crown is working closely with the various regulatory agencies to ensure that the assets are being managed appropriately.

There is regulation in place to ensure that offshore decommissioning is completed in an appropriate way. This occurs across a number of regulators and government, including the Ministry of Business, Innovation and Employment, the Environmental Protection Authority, Maritime New Zealand and WorkSafe New Zealand. 

Environmental and safety regulation is administered by the Environmental Protection Authority, Maritime New Zealand and WorkSafe while MBIE is taking the lead on dealing with the Tui assets, and keeping the Minister of Energy and Resources closely informed of developments.

The Crown is committed to working collaboratively in partnership with Māori in line with Te Tiriti o Waitangi. MBIE is working with Ngā Iwi o Taranaki on the Tui Project to ensure the views of iwi are represented.

The project is being coordinated by the Energy, Resources and Markets (ERM) branch, with support from other areas of MBIE such as New Zealand Government Procurement.

This page will be regularly updated to ensure the latest information on the Tui Project is available.

Project status

The liquidators of the Tamarind companies have disclaimed the Tui assets to the Crown and the Crown has commenced work to manage the assets and plan for decommissioning.

The FPSO Umuroa has been disconnected from the field and work is continuing to prepare for the next phases of decommissioning.

FPSO Umuroa under tow.

The FPSO Umuroa under tow after being disconnected from the Tui oil field.

Darren Yaw/BWO

The decommissioning process

The decommissioning of the Tui field is being conducted in 3 phases; the demobilisation of the FPSO Umuroa coupled with works to ensure that the subsea assets are left safe and secure, removal of the subsea infrastructure and plugging and abandonment of the wells.

The demobilisation phase of decommissioning is now complete.

The subsequent phases of work require detailed planning and environmental approvals. It is anticipated the decommissioning phase will take several years.

The total cost of the decommissioning work will depend on a number of factors.

Cabinet initially appropriated $155 million to fund the Tui decommissioning and a further $196 million was appropriated in the May 2021 Budget.

Treaty partners and stakeholders

The Crown is committed to continued meaningful engagement and consultation with Te Kāhui o Taranaki (Taranaki Iwi) and other Treaty partners throughout the entire decommissioning process.

The ultimate decommissioning of the Tui oilfield will entail the removal of the subsea infrastructure, with the challenges arising from details of how this is best achieved. In the short-term, efforts are also underway to enable the FPSO Umuroa to demobilise and depart New Zealand. Te Kāhui o Taranaki (Taranaki Iwi) are aware of the complexities of the demobilisation and decommissioning and are actively contributing to ensure the infrastructure is safely removed and in a timely manner.

Stakeholders, including the oil and gas industry, service companies, local government, non-government organisations and other interested parties will be kept informed of developments and consulted where applicable.

Contracts and recruitment

MBIE does not have staff who are specialists in the decommissioning of offshore petroleum assets so it needs to procure external technical advice to perform this role.

MBIE has had approval for a small number of fixed-term roles. These will be advertised openly and also listed on the MBIE careers website. Additional advertisements may be utilised and the jobs will be referenced in the ‘Contracts’ section below.

For information on recently filled positions or awarded and upcoming contracts:

Legislative change

The Government has introduced legislation to amend the Crown Minerals Act 1991 in the wake of the issues affecting Tamarind Taranaki and its ability to fund the decommissioning of the Tui oil field.

It will impose a statutory obligation on all current and future petroleum permit and licence holders to decommission their wells and infrastructure.

It also enables the regulator to periodically assess permit and licence holders’ financial capability to meet their decommissioning obligations, requires permit and licence holders to maintain adequate financial security for decommissioning purposes, requires permit and licence holders to make a financial contribution towards any post-decommissioning work, expands enforcement powers and makes other minor changes.

The Bill is currently before the House.

Crown Minerals (Decommissioning and Other Matters) Amendment Bill(external link) — New Zealand Parliament website

Tamarind Taranaki Ltd (in receivership and liquidation)

Tamarind Taranaki Ltd – permit operator of the Tui oil field – was placed in receivership and liquidation in December 2019.

Its parent company, Tamarind Resources Private Limited (Singapore) went into receivership in March 2020 and into liquidation in April 2020.

The Crown is an unsecured creditor in respect of Tamarind Taranaki Ltd (TTL).

The liquidators of the Tamarind companies have disclaimed the Tui assets to the Crown, but the petroleum mining permit currently remains with the liquidators.

Further information

Documents related to the Tui Project are available here:

Cabinet Paper - The Crown's Approach to Decommissioning the Tui Oil Field(external link)

Contact

For more information on the Tui decommissioning process please email decommissioning@mbie.govt.nz

Last updated: 18 November 2021